CHAPTER 1

INTRODUCTION

Referral of inquiry

1.1 On 3 November 2011, the Senate referred the provisions of the Classification (Publications, Films and Computer Games) Amendment (Online Games) Bill 2011 (Bill) to the Senate Legal and Constitutional Affairs Legislation Committee (committee) for inquiry and report by 14 March 2012.[1]

Purpose of the Bill

1.2 Mobile device and online games are regulated as computer games under the National Classification Scheme, a cooperative scheme between the Commonwealth, and the states and territories. Decisions on the classification of publications, films and computer games are made pursuant to the processes set out in the Classification (Publications, Films and Computer Games) Act 1995 (Cth) (Classification Act), and the sale, demonstration and advertising of this material is regulated by state and territory laws.[2]

1.3 The Explanatory Memorandum (EM) to the Bill notes that consumers now have access to an increasing number and range of computer games on a variety of platforms including on mobile devices and other network services. The National Classification Scheme, however, was not designed to cater for the classification of these types of computer games.[3]

1.4 In his Second Reading Speech, the former Minister for Justice (Minister), the Hon Brendan O'Connor MP, outlined the practical challenges in relation to the classification of computer games played online and on mobile devices:

At present the significant majority of mobile device and online computer games are not classified prior to being made available to consumers. This is in breach of a range of relevant state and territory laws concerning the sale, demonstration and advertising of computer games.

If the present legal requirements were enforced, the Classification Board in its present form would be unable to sustain the administrative burden that would be imposed. It would also result in significant compliance costs for industry and may threaten the existence of smaller operators.[4]

1.5 The Minister stated that '[i]ndustry has expressed concern over this regulatory uncertainty and expressed the need for government to clarify the present legal requirements for the classification of mobile device and online games'.[5]

1.6 The EM explains that the purpose of the Bill is to 'address uncertainty about the classification laws for mobile phone and online games'.[6] The Bill aims to achieve this by inserting a new category of 'exempt online games' into the Classification Act, which would remove the requirement for classification of mobile device and online games.[7]

1.7 In introducing the Bill, the Minister noted the Australian Law Reform Commission's (ALRC) ongoing review of the National Classification Scheme. As part of that review, the ALRC is considering the best way to classify computer games. The Bill is intended to operate as an interim measure because any solution on the classification of computer games arising from the ALRC's review is 'still some time away'.[8] The ALRC is due to deliver its final report to the Attorney-General on 28 February 2012.[9]

Provisions of the Bill

Exempt online games

1.8 The main amendments proposed in the Bill reflect the purpose of the legislation to exempt from classification games which are only available online and on mobile devices. The Bill does this by inserting a proposed new section 5C into the Classification Act, which would define 'exempt online games' (item 6 of Schedule 1), and by amending the current definition of 'exempt computer games' in subsection 5B(2) of the Classification Act (item 4 of Schedule 1).[10]

1.9 Proposed new subsection 5C(1) sets out two categories of computer games[11] which are exempt online games:

a computer game that is only available by means of a content service (within the meaning of Schedule 7 of the Broadcasting Services Act 1992 (Broadcasting Services Act)),[12] and can only be played on a mobile device[13] onto which it has been installed (proposed new paragraph 5C(1)(a)); and
a computer game that is only available by means of a content service (within the meaning of Schedule 7 of the Broadcasting Services Act), and can only be played while the player is using an internet carriage service (within the meaning of Schedule 5 of the Broadcasting Services Act)[14] (proposed new paragraph 5C(1)(b)).

1.10 Proposed new subsection 5C(2) provides that a computer game is not an exempt online game if it contains:

an advertisement that has been refused approval; or
an advertisement for a film, or for a computer game, that has been classified Refused Classification (RC)[15] or that, if classified, would be likely to be classified RC; or
material that would be likely to cause the computer game to be classified RC.

1.11 A computer game that is classified is not an exempt online game (proposed new subsection 5C(3)).

Exempt computer games

1.12 Currently, a computer game is an 'exempt computer game' if it 'forms part of, or is included in computer software' for business, accounting, professional, scientific, or educational purposes (subsection 5B(2) of the Classification Act). Item 4 of Schedule 1 repeals the current definition of 'exempt computer game' and inserts a new definition of this term. The new definition of 'exempt computer game' includes the types of 'exempt computer games' under current subsection 5B(2) and exempt online games.

1.13 Subsection 5B(3) of the Classification Act sets out exceptions to the definition of 'exempt computer game'.[16] For example, a computer game is not an exempt computer game if it contains an advertisement that has been refused approval.[17] Item 5 of Schedule 1 amends subsection 5B(3) to clarify that the exceptions apply to the five types of computer games in the current subsection 5B(2) (proposed new paragraph 5B(2)(a)), and not to an 'exempt online game'.

Certificates for exempt online games

1.14 Division 6 of Part 2 of the Classification Act sets out the process of application for, and grant of, certificates for unclassified films or computer games as exempt films or computer games. In applying for a certificate, applications must include, among other things, particulars of any material that could cause the film or game to be classified 'M' or a higher classification.[18]

1.15 Proposed new subsection 5C(4) applies Division 6 of Part 2 of the Classification Act to applications for, and grants of, certificates for computer games as exempt online games, as if the references to the 'M or a higher classification' are instead references to RC.

Sunset provision

1.16 Proposed new subsection 5C(5) puts in place a two-year sunset clause for the exemption from classification for online games. The subsection provides that, at the end of the period of two years starting on the commencement of section 5C, a computer game is not an exempt online game. Further, proposed subsection 5C(5) provides that any certificate granted under Division 6 Part 2 of the Classification Act for a computer game being an online exempt game will also cease to have effect at the end of the two-year period following commencement of the section.

Conduct of the inquiry

1.17 The committee advertised the inquiry in The Australian on 9 and 23 November, and 7 December 2011. Details of the inquiry, including links to the Bill and associated documents, were placed on the committee's website. The committee also wrote to a number of organisations and individuals, inviting submissions by 13 January 2012. Submissions continued to be accepted after this date.

1.18 The committee received six submissions, which are listed at Appendix 1. All submissions were published on the committee's website. The committee did not hold a public hearing for this inquiry.

Acknowledgement

1.19 The committee thanks those organisations and individuals who made submissions.

Note on references

1.20 References in this report are to individual submissions as received by the committee, not to a bound volume.

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