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The Productivity Commission, the Australian Government’s principal independent review and advisory body on microeconomic policy and regulation, has suggested that timely and cost-effective access to copyright content is the best way to reduce infringement, recommending that the Government should make it easier for users to access legitimate content by clarifying the law on geoblocking.
The report, Intellectual Property Arrangements, examines Australia’s Intellectual Property (IP) system in detail, and makes recommendations to improve its operation. It concludes that Australia’s IP arrangements fall short in many ways and improvement is needed across the spectrum of IP rights.
It suggests that the use of geoblocking technology is pervasive, and frequently results in Australian consumers being offered a lower level of digital service (such as a more limited music or TV streaming catalogue) at a higher price than in overseas markets. Studies show Australian consumers systematically pay higher prices for professional software, music, games and e books than consumers in comparable overseas markets. While some digital savvy consumers are able to avoid these costs (such as through the use of proxy servers and Virtual Private Networks), most pay inflated prices for lower standard services and some will ultimately infringe.
The Australian Government should make clear that it is not an infringement of Australia’s copyright system for consumers to circumvent geoblocking technology and should avoid international obligations that would preclude such practices, says the report.
According to the Commission, greater consumer certainty will drive competition and reduce price differentials between Australian and overseas markets — which were about 49 per cent in professional software, 67 per cent in music, and 61 per cent in games in 2013.
Music industry body APRA AMCOS described the report as “a blunt attack” on Australia’s creative industries, unashamedly promoting the interests of those who exploit Australian content over those who create it.
APRA AMCOS is dismayed that the Commission has ignored the submissions and evidence provided by the Australian music community during the consultation process. The factual inaccuracies, disparaging language and alarmist assertions from the draft report not only remain but have been re-stated with renewed fervour and single-mindedness.
The rights of Australian songwriters and composers to earn a living have been overlooked by economists in Canberra in favour of the profit making interests of the multi-billion dollar technology and educational sectors.
APRA AMCOS Chief Executive Brett Cottle said: “Australian songwriters and music publishers pleaded with the Commission to temper the approach it took in its draft report and support a robust copyright framework to ensure creators receive fair payment for their work. Instead, the Commission’s final report endorses all the recommendations in its draft report, and introduces a raft of new proposals, all of which are singularly aimed at weakening Australia’s existing copyright regime – the economic framework around which Australia’s creative industries are built.”
According to APRA AMCOS, the Commission’s recommendations demonstrate a profound lack of understanding of the commercial realities of the Australian content business. The proposed expansion of Australia’s safe harbour scheme to mimic the broken US model is indicative of the Commission’s flawed approach. It is well documented that the application of safe harbours to certain digital services in the US has resulted in a ‘value gap’ – a massive mismatch between the consumption of music on user upload services, such as YouTube, and the revenues returned to songwriters and artists.
“At a time when artists and the wider music industry are finally starting to see a return from streaming services, the Productivity Commission report proposes a raft of changes that will distort the commercial environment in which music licences are negotiated. These changes will allow global technology firms to reduce their bottom line – to the detriment of Australian music creators,” warned Cottle.
“The question must be asked, what problem is the Productivity Commission actually trying to solve? Are online services floundering in Australia? Are they finding it difficult to launch in this territory without the protection of an expanded safe harbour scheme? Of course not. Australia is consistently one of the first international markets in which any new digital music service decides to launch. Why? Because Australia already has one of the world’s most stable, fair and efficient copyright systems.”
Expanding the safe harbour scheme in Australia’s Copyright Act to cover commercial digital services will only serve to undermine the current commercial framework on which rights holders rely in order to make a living from their creativity. The proposed amendment simply does not reflect the current digital environment and will see Australia introducing old law which is not fit for purpose.
Of course, the proposed safe harbour expansion is but one of the instruments the Commission recommends to unravel Australia’s copyright framework. User rights, broader exceptions, the removal of lawful geo-blocks and the repeal of parallel import restrictions on books are all thrown in for good measure.
Perhaps sensing the outrage its final report will generate among Australia’s creative communities, the Commission concludes its key recommendations by taking the extraordinary and unsubstantiated step of warning the Federal Government that past intellectual property “reform efforts have more often than not succumbed to misinformation and scare campaigns”. The irony abounds. It is difficult to think of a more apt description for the Commission’s own report.
APRA AMCOS will respond in full to the Productivity Commission final report early next year.