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Environment and Communications Legislation Committee
06/03/2018

HICKS, Ms Kim, Acting General Manager, Policy and Advocacy, Australian Information Industry Association

Evidence was taken via teleconference—

CHAIR: We'll kick off again. I welcome by teleconference Ms Kim Hicks from the Australian Information Industry Association. Ms Hicks I understand that information on parliamentary privilege and the protection of witnesses has been provided to you. Would you like to make a brief opening statement before we head into questions?

Ms Hicks : Yes, that'd be fantastic. The AIIA supports the technology ecosystem and, especially, the tech start-ups in Australia, and it is for this reason that we really urge government to extend safe harbour to online platforms. Extending safe harbour is critical to Australia's digital future. It puts local businesses on an even playing field with key competitors. It helps build homegrown talent and keeps them here paying taxes. These changes will bring Australia into line with many of our major trading partners who currently enjoy a competitive advantage over their Australian peers, even when they're delivering services to Australians.

In forums discussing export development, the interest of AIIA members, for example, is not actually export opportunities but opportunities to relocate their businesses offshore, due largely to perceived more favourable treatment of innovative start-up businesses overseas. To demonstrate this, AIIA has impact statements from local SMEs. When asked, 'What would extending safe harbour mean for you?' one SME noted, 'We will continue to grow with no fear of being sued to bankruptcy. There's literally no way we can operate and grow our company in Australia under the current laws. It's not a case of if we get sued but a case of when.' Moreover, safe harbour creates more jobs. Google, Facebook, YouTube, Snapchat, Reddit and Pinterest employ over 90,000 people directly, but these platforms don't base their operations in Australia, because of our outdated copyright law, and this means Australians are missing out on jobs and the Australian government is missing out on tax revenue.

Safe harbour helps prevent piracy and protects content creators by providing a clear framework to take down pirate content in a fast, easy and affordable way. This, in turn, makes it harder to access illegal content, which is good for content creators. Importantly, and I think this is the last point I'll make, limiting access to safe harbour does not provide additional protection for Australian content creators. This is because most Australian content is hosted on platforms that already operate within other international safe harbour arrangements, so the ship has sailed. Limiting safe harbour in Australia then only serves to discourage Australian start-ups from the chance to experiment in a low-risk environment, without a tangible, beneficial trade-off to Australian content creators. We really call on the Australian government to support this reform because we're serious about growing the Australian innovation sector and the services sector here in Australia together. Thank you.

CHAIR: Thank you very much for that, Ms Hicks.

Senator URQUHART: The audio was a bit muffled at this end and it was hard to hear everything, but I think we got the flavour of what you said. If I ask you a question that you have already picked up, I apologise, but I am going to ask it anyway. You state in your submission that expanding the safe harbours to all online service providers would protect content creators from piracy. However, some submitters argue that safe harbours do not address piracy concerns and point to the burden placed on rights holders to monitor and issue takedown notices and that services that make available user uploaded content have an act first, negotiate later approach. Can you give us some response to those views?

Ms Hicks : Sure thing. In relation to piracy, the AIIA completely agree that piracy is a huge issue for content creators, and rightly so. It reduces income and potentially makes the profession unviable, especially for independent creators, and this in turn reduces the overall creative content available, which is not good for anyone. What we say though is that safe harbour has never protected a piracy site. I know of no case in the world where a pirate site has been able to protect itself under a safe harbour regime. The regime protects businesses, but in doing the right thing. I would add that safe harbour actually helps limit the number of pirated content available by providing a clear takedown, by providing basically a clear framework for notification and takedown. This in turn makes it harder to access illegal content, which is good for content creators.

In relation to the burden placed on rights holders, this argument has come up before. I would make a few points here. The first is that, whatever process rights holders have in place now to identify infringing content isn't going to be taken away through the safe harbour regime. That safe harbour regime simply adds additional protections. Rights holders can still go about business as usual. The second point is that the burden argument really runs both ways. I'm not really concerned with the googles and the facebooks of the world; they can protect themselves and have billions of dollars to spend on lawyers. What I'm really concerned about and why I'm here today is for local Australian start-ups that are being choked out of existence or, worse still, aren't even being created in the first instance because of our unbalanced copyright laws. It is almost impossible for platform providers, especially the small local platform providers, to determine who will be on their content without being notified by the owner, and this is because IP laws and rights are flexible and they are different in different jurisdictions. I might have full rights in one country but only limited rights in another country, and it's really resource intensive for SMEs to be able to track this down for potentially all the content that gets uploaded on their sites, and in this case the rights holders are simply better placed to know their own ownership.

Senator URQUHART: Thanks for that. In your submission you note that businesses are not looking at export development; rather they are seeking opportunities to relocate offshore to jurisdictions with more favourable treatment of innovative start-up businesses. How many members are considering moving offshore?

Ms Hicks : You'll see in my submission that I've included two impact statements from local businesses, and both those two that we've spoken to basically said, 'Look, if these things don't change, then moving offshore is a definite possibility.' For one of them, it's something they are already considering now. So it is a real concern and a real problem.

Senator URQUHART: There are certainly two examples you've outlined there. Are other members of yours considering moving offshore?

Ms Hicks : What I can say definitively is that the AIIA have run quite a lot of events for our members, and some of those events are export opportunity events and such. In those events and forums a number of different members have come up to us and basically said: 'We're interested in opportunities to relocate offshore. Are you able to help that?'

Senator URQUHART: Are you able to quantify the cost to the economy of the move of these businesses offshore? What is Australia going to miss out on?

Ms Hicks : I think one of the things that I noted is that safe harbour creates more jobs. If you look at Google, Facebook, YouTube, Snapchat, reddit and Pinterest, they basically employ over 90,000 people directly, but these platforms won't operate in Australia because of our outdated copyright laws. This means that Australians are at least missing out on that amount of jobs, not to mention the Australian government missing out on tax revenue on top of that as well. In addition to that, there is the opportunity cost that's involved in not having a safe harbour regime for all those businesses that would never have started up in Australia because it's just not favourable to do that.

Senator URQUHART: Thank you very much for that.

Senator STEELE-JOHN: Ms Hicks, I wonder if I could take you back to your opening statement. The audio at our end was a bit fuzzy. I just wanted to clarify with you that your position in relation to the current proposed legislation is that it doesn't go far enough and that extending safe harbour would bring us into line with international regulatory norms, not the current proposed legislation?

Ms Hicks : Yes, that is correct. The current proposed legislation extends safe harbour slightly, as you know, to universities and other educational institutions, but it doesn't extend it to online platforms. Really, it's the only safe harbour regime in the world we know of that excludes IT platforms.

Senator STEELE-JOHN: I just wanted to clarify that so that everyone on this end was clear. In your submission you state:

Consumer trends are changing and old business models such as exclusive agreements where consumers have to wait longer and pay more for content are simply no longer viable.

Could you expand on that point?

Ms Hicks : Sure. That's just a general point I made in relation to how the issue of piracy really needs to be looked at holistically. So looking at safe harbour, is there one way to do that? But there is also room for change in industry practices. Book deals and movies and TV releases are good examples where sometimes there are exclusive agreements in place that basically mean Australian consumers will get the content later and would normally have to pay a higher premium for that.

Senator STEELE-JOHN: It's been put to the committee that some digital content services use safe harbour protections to undermine free and fair negotiations between digital services and copyright holders. What is your response to that suggestion and what could be done to address the situation?

Ms Hicks : Can I just clarify the question. How do they propose that that works in practice? Because there is a notification and takedown regime, somehow that undermines commercial negotiations? I'm just not sure what the argument is there.

Senator STEELE-JOHN: I share your confusion, Ms Hicks. I think the suggestion is that, if entities understood that they had the protections of safe harbours, there wouldn't be as much pressure upon them to engage with content generators in their licensing framework agreement. I believe that's the thrust of the suggestion.

Ms Hicks : My response to that would be, again, I reiterate: introducing safe harbours doesn't take away existing processes that the content creators have in place at the moment. They are free to still go about and negotiate the way that they would normally negotiate. What safe harbours provide is simply additional protection for online content, for platforms and also for content creators. It essentially creates a framework where you can take down pirated content in a fast, easy and affordable way. This in turn reduces the amount of illegal pirated content that's available online, which is again good for content creators.

Senator STEELE-JOHN: I think that will just about do me. Thank you very much for your time.

CHAIR: Thanks, Ms Hicks. That takes us out for your session. Thank you for presenting today, your opening statement, your submission and answering our questions. We'll let you go on your way.

Ms Hicks : Thank you.