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Environment and Communications Legislation Committee
06/03/2018

SUZOR, Prof. Nicholas, Deputy Chair, Digital Rights Watch

[09:16]

Evidence was taken via teleconference—

CHAIR: Thank you very much for joining us via teleconference. I'm the chair of the committee, Jonathon Duniam, and I've got senators Anne Urquhart and Jordon Steele-John here. I understand that you've received the information on parliamentary privilege and the protection of witnesses. Would you like to add anything about the capacity in which you appear?

Prof. Suzor : I'm an Associate Professor at Queensland University of Technology, and I'm appearing on behalf myself and Digital Rights Watch Australia.

CHAIR: Excellent, thank you. Would you like to make an opening statement before we move to questions?

Prof. Suzor : I'd be happy to. I'll keep it brief.

CHAIR: Thanks.

Prof. Suzor : Essentially, I've already provided the written statement but, just to recap the main point there, I think this is a relatively easy question. It's about how we want decisions to be made about copyrights. We know that sometimes copyright takedown requests are difficult to evaluate. We know that there are exceptions to copyrights and that these depend on the facts that have to be investigated, and they need enough information to be able to identify whether the exception applies. We also know that there are some unscrupulous or desperate claimants who try to use copyright incorrectly to silence criticism and to attack competitors. There are cases where takedown notices come in claiming copyrights that are not necessarily able to be acted upon directly; they're not necessarily correct.

The key question, I think, when we're dealing with the safe harbours and their application to the service providers is who should be making those difficult decisions. We don't want, I submit, technology companies to make these calls. They're not particularly good at it, they don't have the information they need, they don't evaluate those questions or facts and they don't have a system of appeals and due process that we can easily rely on.

So safe harbours, when they apply to service providers, and particularly to internet service providers—the broader category of online content hosts and other internet intermediaries—provide a way to regulate the decision-making process. Essentially, from my perspective, it's not so much about protecting intermediaries—although it certainly does that—it's about protecting the interests of users, individuals and small businesses who use the internet to reach and communicate with other people.

We can talk about adjusting the regulations to make the counternotice system better and so on, but ultimately what the safe harbours provide, when the regulations are working well, is a way for society to set out the expectations that we have of how decisions about copyrights are made. I think that that's a crucial part of this puzzle that often goes underlooked when we think about the safe harbours, particularly as a bargain between copyright owners and service providers, in order to properly protect user interests, and increasingly that means the interests of everyone who uses the internet. We want to make a scheme that is regulated by law, that is able to be reviewed by public authorities and that works in public. I think the core deficiency of Australian law is that it doesn't provide that level of oversight of decision-making processes. By and large the safe harbours work relatively well for the bulk of cases, but when there are mistakes those mistakes have serious impacts, and we want to create a system of due process that allows us to deal with those defects. I'm happy to take any questions.

CHAIR: Thank you very much for that, Professor. Senator Urquhart.

Senator URQUHART: Thanks, Associate Professor. In your submission you comment on the greater risks that are faced by Australian technology entrepreneurs because of the limited safe harbour scheme. Does Digital Rights Watch have any examples of start-ups that are being hampered by the limited scheme?

Prof. Suzor : I noticed on your schedule that you'll be hearing from some people who are better placed to answer that particular question. We don't represent start-ups so much, but we'd only have to point to recent decisions like the Redbubble case, which is an excellent example of the difficulties that Australian start-ups face. One thing that really came out in that case is that it's not clear what Redbubble could have done to have avoided liability. The court ultimately held that Redbubble wasn't liable for any monetary sum, although they awarded them a nominal damages fee, recognising that they hadn't really done anything sufficiently wrong enough in copyright to trigger a damages award but had to be found liable under the authorisation liability. The copyright safe harbour fixes that. It provides a system that clearly sets out what we expect providers to do.

Senator URQUHART: Do you have any examples of start-ups that have moved offshore to take advantage of the more extensive safe harbours offered in other jurisdictions?

Prof. Suzor : It's hard to establish causal effects here. We do hear from start-ups about the difficulties of Australian law and we certainly see examples of things that have been shut down because of an adverse decision under Australian law. An example, not quite related to the safe harbour but in a similar vein, is Optus TV Now timeshifting, format-shifting and place-shifting technology. That does shut down innovation. But what we do hear from start-ups who choose to go to the United States in particular is a slightly more complex story. It is in part about some of the uncertainties under the law, but it's also about the investment environment and their ability to access venture capital funds. I think that copyright presents a significant problem for start-ups, but it's hard to exactly identify a particular organisation that has left because and solely because of copyright difficulties.

Senator URQUHART: Right.

Prof. Suzor : I won't speak for Redbubble and those organisations, but certainly they're on record as explaining the difficulties that they face in their operations, as a relatively young Australian-grown business, dealing with the uncertainty of Australian law, and I think that's a problem.

Senator URQUHART: In your submission you point to the potential for mistakes in the use of takedown procedures to stifle competition and freedom of speech, and you provided three examples of such errors in your submission. How extensive is this problem in Australia?

Prof. Suzor : The extent of the problem is hard to say because this doesn't get reported. One of the challenges of the takedown system is that it's difficult to understand what exactly companies are doing. What we can see is that there are a lot of claims made in Australia. I don't have the exact figures to hand, but certainly there are a lot of takedowns issuing from Australian individuals or received by Australian posters. How extensive the mistake problem is is quite a difficult empirical question.

We speak to a lot of content creators, both amateur people just uploading videos, trying to upload home videos and share their experiences with the world, but also small businesses. We see a lot of people who use platforms like Instagram and YouTube who use the internet to reach audiences, whether they're media companies and entrepreneurs trying to build a media start-up or just ordinary shopkeepers and designers trying to build a label and reputation for themselves. When we go to speak to these people about their experiences using a digital platform, it's actually very common that they've been exposed to some form of takedown and, more than that, that they don't agree with the decision-making process or they don't agree with the reason that has been given that has forced their content to be removed. We see this quite a lot both in copyright and in other areas of law.

One of the key problems, particularly in other areas of law that we've seen, is that the US platforms don't have the same sort of safe harbour regulation to allow the people to make a counternotice and to try and keep the material up. I unfortunately can't give you numbers about the scale of the problem, although maybe some of the later speakers can, but what I can say is that it is extremely common, when talking to people using the internet to post content, for them to have had some experience where the material they posted is removed for what they think is an incorrect reason or that they don't understand the reason. I think it's serious enough to address. I think it's a common experience. We've spoken to news producers who report this. We've spoken to comedians. I've spoken to a fashion designer. These experiences chill the ability of these organisations and individuals to reach their audiences, and I do think that it is a substantial enough problem that it's worth making a fairly simple fix.

Senator URQUHART: The Australian Information Industry Association argued that Australian content is largely already subject to safe harbour regimes because of the platforms that host the majority of Australian content, such as Google and YouTube, and that they benefit from overseas safe harbour regimes. Have you found that that evidence is correct?

Prof. Suzor : It's a little bit difficult—and I know that I'm saying that a lot! It's clear that the US platforms do implement a notice-and-takedown scheme of some kind. Whether that operates under the US DMCA or takes the principles of the US DMCA and applies them as best practice in other jurisdictions is probably a different matter for different platforms. It depends on where the platform's operations are and which law they will interpret when they're looking to put in place their procedures.

What we do know is that many of these platforms will, as they should, obey the validly made laws of different jurisdictions. So if Australia had particular concerns that we wanted to create a set of regulations that better protected the interests of Australian copyright owners, and created that under the Digital Millennium Copyright Act in the US, we could set those procedures up and have a say in how US platforms also make decisions about Australian content. One of the challenges is that sometimes the US DMCA does not protect the local operations of a transnational platform. That is where we see a lot of disputes arising at the moment. Australian courts are finding that just because a US platform follows the US Digital Millennium Copyright Act notice and takedown provisions does not immunise it from liability within Australia. So I think there is still a large gap in Australian law that needs to be addressed.

Senator STEELE-JOHN: Thank you very much for your time, Professor Suzor. Supporters of the bill have argued that it will deliver a scheme that will not distort the commercial market for content and the distribution of that content. Would you be able to give us your view on that argument.

Prof. Suzor : What we've seen in the last 10 to 15 years is quite a lot of movement and development in innovative business models for the distribution of content. We've seen, in large part, an answer to a lot of the problems of rampant piracy that have emerged from the development of new and innovative technologies. This started with the music industry—with Spotify and with Google's development of their content ID matching and advertising system on YouTube. We have seen these platforms develop commercial alternatives to piracy. This has been to the benefit of all users involved. It is to the benefit of copyright owners and it is obviously to the benefit of users of the platform. It is in their interests to be able to share revenue generated from copyrighted content with the owners of that content.

To be frank, a large part of this debate is not so much about the way that the safe harbours are set up. Ultimately, left to a commercial bargain, it is likely that providers and copyright owners will negotiate a system that provides for royalties to be paid and for content to be removed when notice is given. A lot of this debate is about bargaining positions and royalty rates. I am not well-positioned to discuss the commercial realities between copyright owners and interest groups and between service providers and their representatives. What I can say is that we do see differences in royalty rates between countries based on the level of legal risk that is prevalent in any given country. Ultimately, a deal will eventually be reached between those two interest groups. That is just commercial practice: they accept the risk and they come to some sort of negotiated agreement.

The big question for me is the impact on users, as the unrecognised third parties in these systems. That is the big risk of leaving the decisions to the vagaries of commercial negotiations.

Senator STEELE-JOHN: Could you give us an outline of what you think the regulatory space will look like for providers and users in the next decade if we fail to act on this issue.

Prof. Suzor : One of the trends we are seeing, over the last few years in particular, is an increasing distrust of how private companies make decisions about internet content and internet behaviour. You only have to glance at a newspaper every now and then—every few days there is a major story about how a major technology platform has made a decision about what sort of content should be available or should not. This extends from news content to hate speech to cyber bullying and to copyright infringements as well. In general, we are seeing a trend that societies are demanding more transparency in how these decisions are made and they are demanding more due process for these decisions.

Service providers are actually in quite a difficult position. They are being asked by claimants from many different areas to remove content that is objectionable. For many of these types of content, there are grey areas. Just as in copyright—where there are exceptions for fair dealing and so on—in other types of speech one person's defamatory speech is another person's political opinion. The examples go on and on. Over the next decade, I think we will see service providers play an increasingly important role in mediating the conversations that we have online. As those conversations become increasingly important across all walks of life, with our current laws we are heading towards a situation where service providers, to avoid liability, are obliged to make a decision about content over which they have no real ability to come to a determinative conclusion.

You asked for my longer term prediction. I will take you away from copyright for a moment. We see this happen in defamation law a lot. Service providers are liable once they are put on notice. What happens when they don't have a safe harbour scheme is that they have to take a commercial decision based on the risk that they are going to be sued for leaving content up. That commercial decision often has very little to do with the merits of the underlying claim. In defamation, just as in copyright, it is difficult to understand whether a claim is well made out. The service provider doesn't have access to the facts that would justify a defence of, say, truth or honest opinion in defamation or of fair dealing for parody, satire, recent study and so on under copyright law. So without the structure that safe harbours provide, the service providers are left to make a decision and will usually, we have found, tend to err on the side of caution.

There are no penalties for removing content; there are only penalties for failing to remove content. What that means is it is easier in almost all those cases to remove content. Unless the service provider has a particular point that they wish to make or a particular stand that they wish to take, because they usually don't have skin in that game—it is not their content—it is usually easier for them to remove it. If you look to 10 years in the future, I think it is a dangerous world to live in where consumers have no protection for the decisions that are made.

Senator STEELE-JOHN: A much blander and more commercially driven internet then?

Prof. Suzor : Unfortunately, yes.

CHAIR: You mentioned in your opening statement that sometimes takedown notices cannot be acted upon directly. Our previous witnesses made the very good point that there are tens of thousands of videos or files being uploaded per day—or, in the case of YouTube, millions. Can you explain what you meant by 'not being able to act directly upon'?

Prof. Suzor : For the overwhelming majority of cases the takedown notice system works quite well. The error rate that we see is under one or two per cent for major platforms, which receive millions of notices a month. The bulk of those can be actioned directly—and, often, automatically. The difficulty comes when an error has been made in the notice, an error that is not detectable on the face of the notice—for example, about who owns the copyright in the underlying material or whether a licence has been granted in the underlying material for the uploader of the content or whether the uploader can rely on one of the fair dealing defences in uploading the content. And so for that small percentage of content—which turns out to be a much larger number when you are talking about 70 million notices a month, for example—it is difficult or impossible for a service provider to make a decision before they remove the material.

What the safe harbour scheme provides is a way for the service provider to remove the content, or to send notice that it is about to remove the content, and for the user, in that percentage of cases where there is a problem, to file a counter-notice. So it about the evaluation of the exceptions, the grey areas, that can't be acted upon automatically or easily from unilateral action of the service provider. It is in those circumstances that we need some sort of safety valve that provides a way for users to claim due process and to be able to contest the allegations against them.

CHAIR: That's very helpful.

Senator STEELE-JOHN: Professor Suzor, have you had the opportunity to look at the Australian Copyright Council submission to this inquiry?

Prof. Suzor : Unfortunately, I haven't.

Senator STEELE-JOHN: No worries, we'll leave it there.

CHAIR: Professor Suzor, thank you for appearing today.

Prof. Suzor : I appreciate the opportunity.