This chapter examines the principal issues raised by stakeholders. The
committee's overall conclusions on Copyright Amendment (Service Providers) Bill
2017 (the bill) are provided at the end of the chapter.
Stakeholder views on the limited extension of the safe harbour scheme
The principal issue raised in submissions is whether the protections of
the safe harbour scheme should be extended beyond the definition of 'service
provider' proposed by the bill to all online service providers. The following
discussion provides an overview of the arguments provided by stakeholders.
Support for the limited extension
as proposed in the bill
Many submitters representing the rights of copyright holders supported
the proposed limited extension of the safe harbour scheme as envisaged by the
bill. Music Rights Australia (MRA), for example, stated:
We are pleased to support the bill because the government has
chosen to approach the amendments through the first-principle lens. They have
created new, discrete classes of service providers which include those
educational institutions I mentioned before and also cultural institutions and
organisations which support people with disabilities. The music community
supports this innovative and fit-for-purpose solution.
Submitters provided a range of reasons for this support. First, it was
argued that the proposed amendments continue to reflect the original policy
intent for the introduction of the safe harbour scheme, that is, 'to reserve
eligibility for safe harbour protections to only those activities that are
primarily passive, technical and automatic in nature'. The Australian Copyright
It is very clear from the material surrounding the
introduction of the safe harbour regime in the US and Australia that the
principle behind the provisions is that passive carriers with no control over
the material carried on the services should not be liable for copyright
infringement, provided that they, in essence, take steps to remove infringing
content when they are notified.
Secondly, it was stated that the proposed extension balances the
interests of rights holders with those of important educational institutions.
The Phonographic Performance Company of Australia stated that:
...there is a distinction between 'service providers' that are
simply conduits to the provision of content and those that have the ability to
exercise control and monetise the content on their platforms. The expansion of
the safe harbour scheme as set out in the Bill to cover libraries,
organisations assisting persons with a disability, archives, key cultural and educational
institutions means that commercial operators are not able to undermine the
operation of existing digital business models which are licensed on a voluntary
basis. The Bill balances the interests of rights holders with those of the
important educational and cultural institutions included within the Bill.
Thirdly, it was argued that the proposed safe harbour scheme provides an
efficient and affordable redress for online copyright infringement, as it
enables creators to take action against online infringement in a cost-effective
and efficient manner.
Finally, it was argued that the bill 'delivers a scheme that should not
distort the commercial market for content and distribution of that content' as
the entities to which the bill applies safe harbour do not benefit financially
from the content on their networks. This issue was also addressed by MRA which stated that safe harbour should not
be used as a shield to distort commercial negotiations. It noted that in
overseas jurisdictions with safe harbour schemes, the misapplication of the
schemes has undermined the commercial environment for online music services.
This has led to creators, including songwriters, independent recording artists
and labels, not being paid for their creative output at market rates, or
sometimes not at all. MRA concluded:
APRA AMCOS members and ARIA members should have their
legitimate expectations that they will be rewarded for their work recognised
and supported through the legislative framework. This bill does that, which is
why the music community supports its passage as drafted. This is an innovative
solution, and it reflects trends around the world.
Libraries and educational institutions also supported the extension of
the safe harbour scheme as proposed in the bill. It was submitted that the bill
- enable the implementation of reasonable, efficient and effective
remedies for potential online infringements;
- clarify legal requirements and provide protection and certainty;
lower the risk involved with digital engagement projects.
Concerns that the proposed
amendments will not achieve the policy objective
Some submitters argued that the proposed amendments may not achieve the
Government's policy objective. For example, Redbubble argued that there will be
issues of 'practicality' in the distinction being drawn between
education/not-for-profit entities proposed to receive safe harbour protection
and commercial online service providers. Redbubble submitted that it remains
uncertain whether projects between the educational/not-for-profit sector and
commercial entities would receive safe harbour protection under the current
proposals. Further, Redbubble stated that it will create a complex and
confusing system for the takedown of infringing material in Australia:
Rights holders will
need to understand the distinction between educational/NFP sector platforms and
other platforms and make difficult judgements as to whether the safe harbour
process would be applied from one platform to the next.
The Australian Digital Alliance, while supporting the proposed
amendments as 'an important first step', argued that it will not provide a
simple, uniform, affordable and non-litigious system for having infringing
material online removed. The Australian Digital Alliance stated:
By applying different legal settings for groups providing the
same services, this partial solution creates an unnecessarily complex system
for takedown of infringing material in Australia. The law will require
individual creators to understand the technical and legal difference when their
material is hosted on an ISP or a platform, and to know which legal processes
apply in each case. Consumers who have made use of free online platforms only to
see their materials removed due to accusations of copyright infringement will
also miss out on the legal "right of reply" guaranteed them under the
scheme, meaning that material taken down incorrectly will often remain down,
regardless of objections by the poster.
The Redbubble's collaboration with the State Library Victoria was cited
as an example of a project that may not proceed under the proposed amendments.
The Australian Information Industry Association (AIIA) argued that there
is no point to limiting safe harbour in Australia as most Australian content is
hosted on platforms that already operate within other safe harbour regimes. The
Importantly limiting access to safe harbour does not provide
additional protections for Australian content creators. This is because safe
harbour is already available for platform providers that host the majority of
Australian content, such as Facebook, Google, Youtube, and Amazon through
overseas safe harbour schemes. Given Australian content by and large is already
subject to safe harbour regimes, limiting safe harbour in Australia then, only
serves to inhibit innovation without providing tangible benefits to content creators.
Response from the Department of
Communications and the Arts
The Department of Communications and the Arts (the department) responded
to concerns raised by Redbubble and others in relation to collaborations with
institutions. The department responded that:
The intention is that the organisations that fall within the
definition of service providers and undertake activities comply with the
conditions, so, if a university does that and it's in partnership with, say, a
private sector organisation, if it is doing it on its system or network, it
will be covered as long as it complies with those conditions. In the State
Library example, if something was being operated on their network or system and
they complied with the conditions, they would be able to rely on safe harbour.
That's the policy intention. Whether that affects commercial relationships is
not something that the bill deals with.
Stakeholder views on an extension of the safe harbour scheme to all online
As well as comments on the bill, submitters provided their views on the possible
extension of the safe harbour scheme to all online service providers. The
committee notes that there have been several consultations on expanding the
safe harbour regime over the last 10 years, as well consideration by the
Productivity Commission in its report on Intellectual Property Rights Arrangements. The department also undertook public consultations on an exposure draft of the
Copyright Amendment (Disability Access and Other Measures) Bill (the DAOM bill)
released in 2015. The DAOM bill proposed amendments to the safe harbour scheme.
The amendments were removed from the DAOM bill before being introduced into the
Parliament in March 2017. The Government then asked the department to undertake
further consultation on the extension of the safe harbour scheme.
As a consequence of these reviews and consultations, the views of those
supporting, and those not supporting, the extension of the safe harbour scheme have
been well canvassed. The following provides an overview of the issues raised in
relation to further safe harbour reform during the bill inquiry.
Support for an extension of the
safe harbour scheme
A range of submitters commented that the proposed amendments are only
part of the solution to address perceived problems with Australia's copyright
safe harbour scheme. These submitters supported the extension of the safe
harbour scheme to online providers and provided a range of reasons for this
It was argued that an extension of the safe harbour scheme will provide
legal certainty and protection. The Australian Digital Alliance commented that while the safe harbour laws
remain incomplete, Australian technological companies will continue to face
increased legal risk and associated costs. Digital Rights Watch added that:
Without a safe
harbour regime, service providers are left to their discretion to make
judgements about whether content should be removed or not. This is a system
with little transparency and almost no due process protections.
Professor Nicholas Suzor also noted that Redbubble and other
organisations have indicated that they face difficulties in dealing with the
uncertainty of Australian law. Redbubble provided further evidence on this point and noted the proceedings
brought by the Pokemon Company International against Redbubble. While the
judgment found copyright infringement against Redbubble, only nominal damages
of $1 were awarded. The award was made on the basis that Redbubble's business
was 'not directed to profit from infringing of intellectual property' and
further that 'Redbubble was seeking to comply with its obligations under law
and had processes in place to prevent and mitigate breaches which were reasonable
and defensible'. Redbubble concluded:
...despite Redbubble's practices, under the current safe
harbour provisions it does not have the benefit of a statutory limitation on
the remedies which are available against it.
Submitters also argued that the system for the removal of infringing
content is complex and costly and will remain so unless safe harbour is
extended. DIGI commented that an extension of the scheme would benefit rights holders by
creating a simple and consistent system which provides them with an efficient
way to seek the removal of infringing content online without going to court. The
Australian Libraries Copyright Committee stated:
A localised and
universally applicable anti-piracy notice and takedown system for addressing
local copyright infringements would increase clarity and reduce costs both for
our members and for Australian creators.
Another issue raised by DIGI was that an extension of the safe harbour
scheme would protect consumer rights by providing a process (the report and
takedown scheme) through which to challenge incorrect claims of copyright
Other arguments put forward in support of an extension of the safe
harbour scheme centred around the assistance that would be provided to
start-ups and other companies wishing to compete on the world stage and the boost
it would provide to the growth of the digital industry in Australia. For
example, DIGI commented that, without an extension of the safe harbour scheme,
Australian start-ups and service providers will be significantly disadvantaged.
It was argued that one barrier to Australian online businesses being
more competitive is the lack of protection afforded by a comprehensive safe
harbour scheme. The Asia Internet Coalition commented that with 'a less
comprehensive safe harbour regime that currently excludes online service
providers, Australia is a riskier destination for content hosting since local
online innovations do not receive legal protection in return for fighting
piracy'. Professor Kimberlee Weatherall, Professor of Law, University of Sydney, added
that being an internet intermediary in Australia is riskier in terms of
copyright law than in comparative jurisdictions:
Developments in Australian case law...have made clear that the
risks of liability for most internet intermediaries (beyond internet access
providers) are real. There have also been developments overseas although, for
the most part, they have not changed the fundamental position: comparable
jurisdictions make safe harbours available to many internet intermediaries, in
circumstances where Australian intermediaries—private and public—risk copyright
A number of submitters argued that the legal certainty provided by safe
harbour is an enabler of innovation, which is critical in the Australian
technology sector and to promoting international competitiveness. Redbubble expanded
on this argument and noted the growth of companies such as Google, Facebook and
Amazon and stated that the US culture of innovation and competition has been
critical to this success. Google concurred, stating that YouTube 'literally
would not exist today but for the US safe harbour scheme'.
However, Redbubble commented that the current Australian copyright laws
were created for a pre-internet world and not only do they not work in the age
of the internet but also 'do not deal with the reality of user generated
Redbubble argued that there was an opportunity cost to Australia of a
limited safe harbour scheme with start-ups seeking to move offshore to take
advantage of the safe harbours in other jurisdictions. Redbubble stated that 'Australia
cannot even begin to count the loss from such foregone opportunities, but
undoubtedly it will continue to slip further down the innovation ranks'.
DIGI also commented that the start-up sector had been 'quite vocal' on
the issue of safe harbour and had stated that reform of the safe harbour scheme
was 'up there with things like R&D tax incentives and 457 visas, in terms
of the importance to the industry thriving and surviving in Australia'. DIGI
pointed to examples of the importance of technology companies to Australia and
concluded that 'the impacts and the consequences of not reforming the safe harbour
scheme, and including all online service providers, including the tech sector,
will have a devastating impact upon Australian innovation'.
It was also submitted that an extended safe harbour scheme would bring
Australia into line with many of our major trading partners, would align with
best practice and would provide a level playing field with international
counterparts. Google Australia commented:
By excluding the commercial sector from our safe harbour
scheme as currently proposed in this bill, Australia is looking to adopt a
model that exists nowhere else in the world. This will place Australian
start-ups and online businesses at a big disadvantage to their competitors in
countries that have strong frameworks, such as the United States, Canada, the
European Union, the UK, Singapore, South Korea and Japan.
Similarly, the Australian Digital Alliance stated:
A full copyright safe
harbour is very much the global norm, and is a requirement of most modern bi-
and multi-lateral treaties. It is therefore those companies who have chosen to
make Australia their home who are penalised by the decision not to include all
service providers in our system.
Concerns relating to further extension of the safe harbour scheme
The committee also received evidence from those who did not support an
extension of the safe harbour scheme beyond the measures proposed by the bill.
These submitters argued that safe harbours should not be available to content
aggregators, search engines and social media platforms. For example, the
Australian Society of Authors stated:
The ASA is pleased that the Bill does not extend safe harbour
to other kinds of service providers such as content aggregators, search engines
and social media platforms. As you would know, the creative sector has
vigorously opposed the extension of safe harbour to commercial platforms.
APRA AMCOS cautioned against an extension of the safe harbour scheme to
intermediaries, particularly to those entities which derive a profit from commercial
exploitation of music by way of their services, as this would jeopardise rights
holders' ability to realise returns on their creative and financial investment.
APRA AMCOS argued that this bill should represent the end of the Government's
reforms in this area.
The Australian Copyright Council contended that there would be four
major detrimental consequences should safe harbour be extended to all online
platforms which are not passive carriers:
- for those platforms where licences to use copyright material are
available, the incentive to enter into a licence agreement would be
online platforms would not have to bear the risk of publication
which other publishers bear—this would give online platforms an unfair
advantage over traditional publishers;
- when the publisher does not bear the risk of publication, all of
the risk is placed on the author of the infringing content. That means that,
although the publisher has profited from the publication of the content, it is
only the uploader who is liable to pay damages; and
- the only stakeholder who really suffers in the infringement
scenario is the original copyright owner.
The Australian Copyright Council concluded:
The safe harbour system, when it's applied to content
platforms that are not passive providers, including those that generate
billions of dollars a year in revenue, encourages wilful blindness on the part
of the platform proprietor. The only stakeholder who bears a risk is the
creative copyright owner, which is why we urge that the bill remains in its
APRA AMCOS also pointed to the licensing arrangements already in place
There are simple, efficient, collective licensing solutions
that are available to the online platforms that we're discussing today—and I'm
not just talking about the YouTubes and the Facebooks of this world; I'm
talking about the smaller platforms. APRA AMCOS, for its part, has a tailored
licence that is aimed at start-up organisations, with reduced licence fees,
simplified reporting arrangements, phase-in rates—all for the purpose of
providing a simple licensing solution, rather than those platforms getting a
free kick under an exception to the Copyright Act. So that's really the
position that our members have.
Submitters opposed to the further extension of the safe harbour scheme
also questioned the argument that this was a necessary step to ensure continued
innovation in the digital sector. MRA argued that it is an 'unproven premise'
that to do so is a pre-requisite for stimulating digital growth in Australia. MRA also stated
that it 'did not believe that this is a discussion between copyright owners and
innovation' rather it is a 'question of rewarding adequately in a digital
environment and not using the safe harbour as a shield to distort commercial
In response to comments regarding possible complexity that may be
introduced as a consequence of the limited safe harbour proposed by the
amendments, the Australian Copyright Council stated that:
As to the confusion and complexity of the law, our view is
that the copyright law is not a textbook. It's not a text that can be analysed
by academics; it's a practical working manual for people who make a living out
of copyright material. The systems as they operate in real life and in
commercial practice can be complex, but the people who operate the systems are
expert. Users of copyright material, particularly online, benefit from very
widespread licensing arrangements that ensure that most activity that occurs
online through the major content providers is not infringing. Most of those
commercial relationships are appropriate and amicable, in my experience.
MRA also commented on the United States safe harbour system—US Digital
Millennium Copyright Act of 1998 (DMCA)—and noted that it is currently being
reviewed. It went on to state that over time the 'legislation has been read
down through significant litigation in such a way that it now acts to distort
the market'. In its view:
...the US is struggling with the very issue which we think this
bill has resolved. There's a commercial environment which has a different
dynamic and a different place to have discussions, which is through licensing,
and then there are the passive and automatic groups, such as the classes
identified here in this bill.
Safe harbour schemes and piracy
A major issue raised in evidence was the impact of safe harbour on
efforts to combat piracy. Submitters provided a range of views in relation to
piracy with some submitters argued that safe harbour limits piracy.
Google, for example, stated that safe harbour encourages a system of
shared responsibilities that actually increases the ability of all actors to
fight piracy. OneGov, added that extending safe harbour helps to limit piracy by providing a
clear framework to take down pirated content in a fast, easy and affordable
way. This in turn makes it harder to access illegal content. OneGov concluded:
Safe harbour is a
sensible solution that allows content creators and policy makers time to
develop strategies against piracy that tackle the issue holistically.
Other submitters pointed to the DMCA as an example of a safe harbour
regime that has:
...led to further
ongoing collaborative efforts to improve the efficiency and effectiveness of
the DMCA notice-and-take-down system with voluntary measures...Comprehensive safe
harbour protections make collaboration and innovation in tools to address
online piracy possible.
Redbubble commented that 'the DMCA brings order to this chaos and allows
the content owners to dictate how their rights are enforced, while allowing
marketplaces like Redbubble and content owners a clear avenue by which to
engage and a clear process to operate within'. The Australian Digital Alliance expanded on this point and commented that a
comprehensive safe harbour system allows those with the fewest resources to
understand how to combat piracy and to take legal action. The Australian
Digital Alliance concluded:
The whole point of a cover-the-field safe harbour system is
to ensure that everybody is encompassed within the same system, not to pick and
choose those few big people who can afford it and can work in the system and
leave a system that excludes everybody else. This is why licensing is great,
but it doesn't replace a proper legislative system.
However, other submitters did not agree that safe harbour is beneficial
to limiting piracy. MRA contended that music rights holders in Australia have
not benefitted fairly or proportionately from the digital music consumption because
overly broad safe harbour schemes have distorted the markets. MRA stated that:
Uncertainty around the proper application of safe harbours
has emboldened services that make available user-uploaded content to take an "act
first, negotiate later" approach, building large music services without a
licence, fundamentally distorting the negotiation process. If they do enter
into licence negotiations (as opposed to carrying on business in the hope they
will not be sued), the choice for rights holders is to
- accept the
terms on offer and get some return for the use of their music;
- rely on
ineffective notice and takedown procedures provided in safe harbour legislation
to try to prevent their content being distributed without a licence; or
- sue the
service under an uncertain legal framework and delay any chance of getting
income from their music.
As to the effectiveness of notice to takedown procedures to prevent
piracy, the Arts Law Centre Australia noted the burden placed on rights holders
to monitor and issue takedown notices relating to reposting of infringing
content once a take-down notice has been issued. It submitted service providers
are better placed to undertake this activity than copyright holders.
MRA also considered notice and takedown systems are ineffective against
piracy, noting that most service providers remove only the specific URL link
notified in the takedown notice without taking any further action. MRA stated:
This makes the
process ineffective because (a) even if one URL link or one copy of an
infringing file is removed, there are typically many thousands of other URL
links to, or other copies of, the same infringing title that remains on line;
and (b) content or links once removed are often quickly reposted and most
service providers do not take steps to prevent this.
MRA also argued that pirate sites benefit under the notice and takedown
Under the guise of
the notice and take down policy, pirate sites purport to operate legally,
knowing that rights holders will have to incur huge expenses in suing them to
establish that safe harbours do not apply and/or engage in mass notification
programs which are not effective in preventing infringement. The problem is
compounded by uncertainty over the scope of safe harbours, making litigation
complex, lengthy, and costly.
The Government's approach to safe harbour reform
The department submitted that the Government has taken an incremental
approach to safe harbour reform. It noted that by taking the first step to
extend safe harbour to educational and cultural institutions and organisations
assisting people with a disability, the Government will ensure that 'these
sectors, which provide beneficial services to the Australian community, are afforded
protection sooner rather than later'.
In relation to further reform, the department observed that 'a blanket
extension still remains a highly contested reform' with polarised views of
stakeholders leading to a lack of consensus on a full extension. The department
added that there was more consensus in extending the scheme as proposed by the
bill. The committee was informed that the department had undertaken consultations
with stakeholders in order to 'try and understand and unpick all of the issues
around such a complex issue'. It would also continue to consult stakeholders.
The department also stated that:
also allows the Government to develop conditions for safe harbours in synchrony
with international developments to ensure that our scheme is effective and
consistent with our international counterparts.
The department also commented on the argument that safe harbour
supported innovation. The department noted that there are a number of countries
which do not have safe harbour but still have innovation. It added that it had received
'disputed evidence about how important safe harbour is to innovation' and noted
that there are other factors at play in creating an environment for innovation
which business needs to take into account. The department went on to state that it had looked for 'strong evidence that
linked safe harbour to innovation', however:
We didn't find that direct linkage. There's some evidence
about a general copyright approach. I know that there have been some studies
that have looked at flexible exceptions and their contribution to innovation.
But we did not find any evidence that directly linked safe harbour to an
increase in innovation.
The department also commented on the reviews of both the US and EU safe
harbour schemes. While agreeing that neither of these reviews are necessarily
looking at pulling back on who the safe harbours apply to, it commented that 'what
has happened overseas and what is in place overseas is important, but we need
to look at what is appropriate and fit for purpose in Australia'. The
department added that:
The complexity of the issues and the really diverse views and
polarised views of stakeholders makes it a really difficult path to navigate,
and that is why we are really trying to take what is a balanced approach where
there is an openness to extending safe harbour.
Submitters raised drafting issues which they argued may lead to
First, the Law Council of Australia (LCA) argued that the wording of
subsection 116ABA(1) (definition of a service provider) is unclear as it can be
read exclusively or inclusively. In addition, the LCA commented on the wording
of subsection 116ABA(2). This subsection is intended to clarify that, if a body
administering the institutions covered by the definition of service provider in
subsection 116ABA(1) has other functions unrelated to these institutions, those
functions will not be covered by the safe harbour scheme. The LCA noted that
subsection 116ABA(2) provides that only activities done because of a
'relationship' between the administering body and the institution fall within
the safe harbour. The LCA considers the concept of 'relationship' is unclear
and stated that only activities done because of a 'relationship' fall within
the safe harbour.
The LCA recommended that the entities to be included within the definition
of 'service providers' and which activities are to be covered be clarified.
Secondly, a number of submitters raised concerns with the use of 'by'
rather than 'by or on behalf of' in the legislation relating to the
institutions intended to be covered by the safe harbour scheme. Universities
Australia argued that this drafting creates uncertainty:
...the current drafting
could potentially be construed as limiting the protection of the safe harbours
to activities that are carried out "by" a university itself,
which could potentially leave universities outside the scope of the safe
harbours in the event that the relevant activities were carried out by a third
party provider "on behalf" of the university.
The Copyright Advisory Group to the COAG Education Council recommended
that the bill be amended to make it clear that the safe harbour extends to
activities carried out by a third party 'on behalf' of an entity that is a
service provider under the bill. The LCA also supported this approach and commented that 'it would allow public
interest organisations to innovate entirely in-house, but also then use
services and products developed in the private sector'.
The committee notes that the Government has had the benefit of the outcomes
of a number of reviews of the extension of safe harbour and the extensive
consultation by the department on this matter. These reviews and consultations
highlighted the highly polarised views and lack of consensus on further safe
harbour reform. Similarly, the committee received conflicting evidence. In
particular, the committee notes the evidence from those arguing that safe
harbour reform will benefit innovation. However, in its evidence to the
committee, the department stated that it did not find evidence to support this
Given the divergence of stakeholder views and the complexity of the
issues being considered, the committee supports the Government's incremental
approach to safe harbour reform. The proposed amendments will ensure that educational
and cultural institutions and organisations assisting people with a disability
will be afforded protection immediately. The committee considers this to be a balanced
and reasonable approach. The committee also notes and appreciates the reassurance
that the department will continue its consultation with stakeholders.
In addition, the committee notes the comments of submitters relating to
the use of 'by' rather than 'by and on behalf of' in the bill. The committee is
of the view that the department should consider whether legislative certainty
is required in relation to this matter.
The committee recommends that the Senate pass the bill.
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