ONLINE COPYRIGHT INFRINGEMENT DISCUSSION PAPER SUBMISSION...

ONLINE COPYRIGHT INFRINGEMENT DISCUSSION PAPER

SUBMISSION OF APRA AMCOS

SEPTEMBER 2014

Introduction

1. APRA AMCOS welcomes the Government’s timely and important proposals designed

to address online copyright infringement and is grateful for the opportunity to comment

upon them.

2. APRA is the collecting society in Australia in respect of the public performance and

communication rights of composers and music publishers. APRA’s blanket licences

cover the performances of music in over 120,000 Australian businesses, including retail

shops, nightclubs, restaurants and festivals, among many other settings, as well as the

communication of musical works online, such as in download and streaming services.

AMCOS is the collecting society in Australia in respect of reproduction of music in

certain formats. AMCOS licences cover the reproduction of songs and compositions on

CD, DVD, online, for use as production music and for radio/TV programs. Together,

APRA AMCOS control the copyright for such purposes in almost all commercially

available musical works, by virtue of assignments from its local members and

affiliations with similar overseas societies. Since 1997, the two organisations have been

administered in tandem, and these submissions represent the united view of both.

3. APRA and AMCOS together represent more Australian copyright owners than any

other party. APRA AMCOS together have more than 87,000 members and 121,000

licensees. The membership is diverse, ranging from unpublished songwriters to major

music publishers.

4. The creative industry sector is committed to working with the Government and other

stakeholders to develop a legal framework which ensures there are effective and

flexible processes in place to protect copyright online. There are a number of proposals

being put forward in this consultation process from differing representatives from the

creative industries. Whilst these proposals may take differing approaches, they are put

forward to achieve the same outcome – to ensure there is an effective legal framework

and the necessary legal incentives for service providers and rights holders to work

together to ensure the Act will continue to support creative content owners and those

who invest in them to continue to invest in and produce creative content to meet

legitimate consumers’ expectations.

Current state of the Australian online music industry

5. Copyright law ensures that Australian creators can participate meaningfully in the

digital economy. In 2012, PriceWaterhouseCoopers published its report on the

Economic Contribution of Australia’s Copyright Industries.1 In 2010/2011, 8% of the

Australian Workforce was employed in an industry reliant on copyright, and copyright

industries comprised 6.6% of GDP.2 As the Discussion Paper notes, the copyright

industries generate economic value of more than $90 billion, including $7 billion in

exports. But digitisation and the advent of online distribution means these industries are

particularly susceptible to harm from online copyright infringement.

1 The Economic Contribution of Australia’s Copyright Industries 1996-97 to 2010-11 2 Ibid p23, p15

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Online Copyright Infringement – APRA AMCOS SUBMISSION - 5 September 2014

6. The music industry was the first content industry to digitise. Copyright owners have

had to address the issue of endemic online piracy, while at the same time reinventing

their businesses in line with new delivery mechanisms. Australian consumers of music

now have unprecedented access to vast amounts and a diverse range of copyright

music, in more flexible formats than have ever been available. Digital music presents

enormous opportunities for copyright owners as well as consumers, and Australians’

consumption of music is enthusiastic.

7. Recordings of musical works have been available for download over the internet since

1996. However, the distribution of music files across the internet remained largely

unlicensed by copyright owners until 2003.

8. Searching and locating music files was difficult until the launch of Napster in the USA

in 1999. Napster provided a centralised file swapping service, focusing on music, that

used its own servers to maintain a database of users and the music files they wanted to

swap, but with the files themselves swapped from user to user. Napster was a precursor

to the later genuine peer-to-peer (P2P) file swapping services such as Kazaa and

Grokster – where both the searching and swapping facilities were provided on a P2P

basis.

9. Grokster and Kazaa further decentralised the concept of P2P networks. Whilst

significant legal victories against the two services were achieved in the USA and

Australia respectively in 2005 and 2006, file swapping continues with other services,

such as Bittorrent, eDonkey and Limewire. The popularity of P2P services grew, in

many respects, hand-in-hand with the development and roll-out of high-speed

broadband services. Such services permitted the faster download of music files – and

increasingly music video files – making the swapping process quicker and ultimately

more attractive.

10. In April 2003 Apple launched its companion service to the iPod, the iTunes Music

Store in the USA. iTunes permitted users to manage and file their digital music

collections. The music store facilitated the purchase and download of music onto iPods.

Apple opened its Australian store in October 2005. Less than a decade later, there are

now a large number of legal download services operating in Australia. Australia is seen

internationally as an early adopter of digital music services, and is now consistently

targeted by innovative international digital music players as part of early-stage

international expansion plans. Australia’s leading digital music market position has

been developed on the back of strong competition between new local offerings and

international expansions.

11. In the last month, the Digital Content Guide – of which APRA AMCOS was a funding

member – has been launched. 3 The Digital Content Guide was developed by a group of

creative rights holder and creative content industry associations to help consumers find

licensed content online across a range of services and platforms. The site indexes the

licensed services available in Australia in order that consumers can make an informed

decision about where they source content.

12. Since 2011, a large number of music streaming services have commenced operation in

Australia. These services include overseas services such as Spotify, Rdio and Pandora,

and locally developed music services such as JB Hi Fi and Samsung Music Hub.

These services offer unlimited streams of music on an advertising funded free model or

a premium paid service, and are currently averaging more than 400 million plays per

month. As discussed further below, Australia is seen as a market leader with music

3 http://digitalcontentguide.com.au/

http://digitalcontentguide.com.au/

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services, launching in Australia very early on in the services’ global roll outs and at

similar pricing points (if not better) as the US and European territories.

13. It is clear that the streaming services are attracting an increasing number of customers

at the expense of the download services. This has a dramatic downward effect on

creators’ incomes from digital sources, but also means that customers have inexpensive

or even free legal access to vast numbers of works.

14. This digital market requires adequate legal support. A marked decline in physical

product revenue and sales is clear from the evidence.4 On 7 February 2013, ARIA

publicly announced that the continued uptake of digital music combined with a host of

new streaming services entering the local market, resulted in over 46% of the market’s

value coming from digital products in 2012, compared to 36.7% in 2011. The number

of physical products sold in 2012 dropped 6.42%, following a 13.85% drop in 2011. As

noted above, the streaming services are causing a further decline in revenues.

15. APRA AMCOS does not suggest that previous levels of revenue should be protected,

although it is clear that there must be sufficient incentive for musical creation to

continue in any commercial sense. However, when there is instant, ready and even free

legal access to music it cannot be argued that price and availability are at all relevant in

any decision not to pursue those who permit piracy to occur.

16. For a number of reasons, the new streaming services have not yet proved to be as

financially viable for creators. There is ample evidence of the tiny amounts distributed

to even the most popular songwriters for use of their works on streaming services

including Pandora. Further, if consumers continue to obtain illegal permanent copies of

works, the number of legitimate streaming services in Australia will reduce and even

that business model may become obsolete. A number of recent reports, as well as the

Attorney-General, have noted that Australia is the world’s worst offender with respect

to online copyright infringement.5 Without legislative intervention, there is no reason to

believe that the Australian enthusiasm for piracy will diminish.

17. APRA AMCOS respects that fact that the Government has recognised that better legal

protections are required for the content industries to operate in the digital space. And

laws which make piracy more difficult, such as those being now proposed, not only

function to better support content creators, but also level the playing field on which

licensed providers and unlicensed providers operate. Creating an environment in which

licensed providers face less of a competitive disadvantage as against those who do not

pay for a licence is important to attracting the investment of the technology companies

of the future.

18. Given the economic importance of Australian copyright industries, and as a matter of

principle, the Australian government should move to protect Australian creators from

those who steal their products. For the most part, and unlike in relation to the theft of

tangible property, APRA AMCOS has no expectation that the government will

contribute resources to detecting, investigating, policing and prosecuting copyright

infringement – APRA AMCOS, like all other content owners, absorbs these onerous

costs. However, in order to create an environment in which so many thousands of

individual songwriters and composers – each a small business – can continue to trade,

4 http://www.aria.com.au/pages/statistics.htm 5 A recent study into the piracy of Game of Thrones, the most pirated show on TV, demonstrated that on a global

level, more downloads come from Australia than any other country (and on a list of the top 10 infringing cities in the world, all of Sydney, Melbourne, Perth and Brisbane feature). [KH comment: I’m not sure about buying into the whole GOT thing]

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the law should be amended to better protect their rights and secure their commercial,

professional and artistic futures, as well as Australia’s cultural heritage.

Debunking some myths surrounding the debate

1) Access, availability and price alone do not fix piracy – it’s impossible to compete with free

19. Contrary to what is commonly argued, copyright infringement is not induced by a lack

of availability or an unreasonable price point. It is rather occasioned by some, but

clearly not all, consumers’ unwillingness to pay for that which they can readily obtain

for free. No content creators – in fact, no business – is able to compete with free, where

a considerable section of the Australian population perceives there to be no

disincentive to consuming pirated content. The perceived and real ability for consumers

to infringe with impunity stems from a lack of leverage held by content creators – and

this is the importance of the proposed amendments to law. While it is true that content

owners may have the legal ability to enforce their rights against individual infringers,

the reality of the landscape in Australia is that to do so would be to illicit unparalleled

levels of consumer vitriol, and would yield no real disincentive to consumers. When

such proceedings have been brought in the United States, the existence of statutory

damages has at least meant that awards of damages have been at a level that might

provide a disincentive to other offenders. The method of calculation of damages in

Australian courts means that no individual domestic infringer would be likely to incur

damages at any level that would justify on any sort of economic basis the bringing of

proceedings.

20. In any event, APRA AMCOS would far rather expend its resources in developing

licensing models and in educational initiatives to encourage widespread respect for the

rights of creators, than in enforcement proceedings against individuals.

21. In APRA AMCOS’s view, as long as the unlawful free option is available with

impunity, piracy will remain a major problem and legal offerings will struggle to

compete even if access, availability and price are addressed. This has been APRA

AMCOS’s experience in the music industry in Australia and a similar message has

emerged from wider research across all online content in the UK undertaken by

communications regulator OFCOM.

22. i) Australian piracy research results, 2012 and 2014

23. Along with a number of other content owners, APRA AMCOS has recently been

involved with undertaking ongoing research into piracy in Australia. Its most recent

study, conducted during April 2014 by UMR Research, showed that music piracy

levels still sat at the same level as film and television, even though Australia has one of

the most competitive and affordable global markets for next generation digital music

services. Additionally, music piracy levels have not seen a relative reduction compared

to movies and TV shows since the early research from December 2012. In both the

2012 and 2014 studies, the level of music piracy sits at a similar level to that of both

film and television. If current claims that addressing access, availability and price

would reduce the extent of piracy in Australia, then APRA AMCOS respectfully

questions why musical content follows the same piracy trends as television and

cinematic content, even though the music industry has developed a much greater array

of cheap, prompt and convenient digital service providers.

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Australian piracy levels by content type, UMR Research, April 2014. http://www.umr.com.au/

ii) UK research finds “It’s free” as top reason for piracy even though Netflix etc

available

24. This view is supported by the findings of an extensive four-part research study 6

undertaken in the UK between May 2012 and May 2013. The study, commissioned by

Ofcom and undertaken by Kantar Media with the financial support of the UK

Intellectual Property Office (IPO), undertook large-scale consumer tracking into the

extent of online copyright infringement, as well as wider digital behaviours and

attitudes, among people aged 12+ in the UK.

Although all-you-can-eat audiovisual subscription services such as Netflix and Amazon

Instant Video (formerly Lovefilm) were available in the UK for the duration of the

research – the very services many claim would solve piracy problems in Australia – the

top reason given for online infringement was “It’s free”, as shown in the table below.

Amongst the heaviest infringers – who according to the study were responsible for 74%

of all infringed content – this reason was cited by 71% of people.

6 http://stakeholders.ofcom.org.uk/market-data-research/other/telecoms-research/oci-wave4/

http://www.umr.com.au/

http://stakeholders.ofcom.org.uk/market-data-research/other/telecoms-research/oci-wave4/

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Reasons for online infringing, OCI Tracker: High volume infringers analysis report,

Kantar Media / OFCOM, 2013

25. Although numerous competitive audiovisual and music services such as Netflix and

Spotify were available in the UK, the highest infringers continued to cite free content

as their top reason for infringing. Claims that the local availability of audiovisual

services such as Netflix are the solution for piracy are difficult to believe in the face of

the UK experience.

2) There is no “Australia tax” or “price gouging” in local next generation music services

26. It is a misconception that digital music prices in Australia are high when compared to

the rest of the world. Not only do Australians have one of the most competitive music

markets in the world in terms of number of service providers, we have one of the most

affordable.

27. In November last year, APRA AMCOS studied pricing of the world’s leading music

subscription service, Spotify7 . Of the 35 markets where the service was available,

Australia’s price sat slightly below the international average price of US$11.27, lower

than that of the larger music markets of Germany, UK and France. Australia’s price is

also lower than in the world’s leading streaming music countries of Sweden, Norway

and Denmark. But looking beyond straight exchange rates, Australia was found to have

one of the most affordable services in the world in terms of both disposable household

income and mobile average revenue per user (ARPU), as shown in the table below.

7 http://www.apraamcos.com.au/media/5279/apra-policy-whitepaper-music-streaming-nov2013-1.pdf

http://www.apraamcos.com.au/media/5279/apra-policy-whitepaper-music-streaming-nov2013-1.pdf

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Source: APRA AMCOS Policy Department whitepaper, Australia: The most expensive

country in the world for digital music streaming? No, far from it, November 2013

Notions of equity and fairness

28. APRA AMCOS is unapologetically passionate about strong copyright protection. As a

not for profit organisation which has worked closely with virtually all Australian

songwriters since 1926 we have been able to observe the tangible effects had by both

strong and weak copyright protection on the lives and livelihoods of so many creative

individuals. In empowering songwriters to carry on their creative endeavours, by

licensing their creations on their behalves, and in providing consumers with a viable

and legal way of accessing content, APRA AMCOS considers itself to play an

important role in facilitating the physical, and now digital, music markets in Australia.

29. Lobbyists representing well-resourced copyright users, particularly in the social media,

IT and telecommunications sectors, have suggested that strong copyright protections

impede consumers’ “natural rights” to access content. APRA AMCOS submits that this

viewpoint is misguided. Equating the interests of content-creators to commercialise

their work with content-users to access the work misapprehends any reasonable notions

of equity and fairness. Of course, professional content creators are commercially

interested to encourage content consumers to access their products. However, content

creators should be able to exercise reasonable commercial discretion as to how their

creations enter the market and in what manner, including at what price. The existence

of collecting societies like APRA AMCOS dilutes this control on the part of the

creator, in the interests of encouraging widespread licensing and therefore increasing

legal access. It is regrettable that these points of principle have been overlooked in the

somewhat hysterical attention paid to the alleged interests of the population at large to

access one particular television program.

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30. Music and art are essential to civilisation, but their importance does not mean that

creators’ rights to be compensated for their work should be sacrificed in favour of

consumers’ interests in access. APRA AMCOS considers highly objectionable any

insinuation made by any stakeholder in the course of this enquiry that piracy is

necessary or acceptable because availability is too expensive, too inconvenient or too

tardy. First, the claim is simply untrue; APRA AMCOS relies on evidence presented in

this submisison that shows that most consumers are prepared to pay the prices of

authorised content, even if Australians remain among the world’s most notorious

infringers, which is to say that in reality piracy in Australia is less a case of prices

being too expensive and more a case of prices being more expensive than free.

31. Secondly, APRA AMCOS points out that many essential commodities – groceries,

education, medicine and healthcare, utilities, housing and accommodation – are

difficult to afford and not always available in the manner desired; but it is

unfathomable that reasonable commentators or stakeholders would excuse the theft of

any of those commodities on the basis that the providers charge too much, or do not

provide goods or services in the exact manner sought by each consumer. If those

regulating Australia’s economy want to protect the copyright industries – and this

Government has demonstrated an unmistakable and welcome intention to do exactly

that – then the conversation must begin with the unambiguous declaration that the

wholesale theft of property, whether real or intellectual, should not be tolerated.

International backdrop

32. The copyright industries are necessarily global in perspective, particularly in the digital

era. Few organisations are more exemplary of this point than APRA AMCOS, which

relies on its international affiliates to license Australian music overseas and which in

turn is relied upon to license the world’s musical repertoire in Australia. APRA

AMCOS accordingly knows the importance of international cooperation, and strongly

urges the government to frame any legislative reforms with intimate awareness of the

international backdrop against which any reform is proposed. The Australia-United

States Free Trade Agreement requires among other things that each party shall provide

legal incentives for service providers to cooperate with copyright owners in deterring

the unauthorised storage and transmission of copyrighted materials (Art 17.11, clause

29). Similar provisions exist in the Australia-South Korea Free Trade Agreement (Art

13.9, clause 29) and the Australia-Singapore Free Trade Agreement (Art 12, clause 1).

The agreement with South Korea also stipulates that each party shall provide measures

to curtail repeated copyright and related right infringement on the internet (Art 13.8,

clause 28).

33. Jurisdictions around the world have introduced a number of different responses to the

issue of online copyright infringement:

(a) In the US, the graduated response scheme, or the Copyright Alert System, was

developed as a result of an agreement between the copyright industries and ISPs. The

CAS was developed by the Center for Copyright Information, a coalition representing

the nation’s leading copyright owners and five of the largest ISPs – with input from

consumer advocacy groups – and the program’s participants include these larger

organisations as well as hundreds of representatives of the independent music and film

sectors. After a copyright owner provides an IP address to one of the participating ISPs,

the ISP then notifies the subscriber via email and/or other technologies such as in-

browser alters, that their account was involved in sharing copyright content over a P2P

network. The notice, which is meant to be education in nature, also includes

information about how to prevent future infringements (such as securing Wi-Fi

connections with passwords, and where to locate content that is legally accessible.) The

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second time an alert is sent, the notice is essentially the same as the first. The third and

fourth letters require the subscriber to acknowledge that they have received the alert

and pledge to stop infringing. If a fifth and sixth alert are sent, mitigation measures will

be implemented, such as requiring the subscriber to take a copyright tutorial, or

reducing the subscriber’s internet speed significantly for several days. If no further

alerts are sent within a 12-month period, the number of strikes against the subscriber is

reset at zero. If a subscriber continues to infringe beyond the sixth alert, no further

alerts are sent and a copyright owner may pursue a claim against the infringer. If a

subscriber receives 3 alerts, he or she may appeal the to an independent arbiter. Such an

appeal costs US$35, but the fee is refunded if the appeal is successful. The graduated

response scheme has experienced staggering success in the Unitted States. In May

2014, the CCI released its first CAS progress report highlighting initial

accomplishments. Notably, the report showed that 1.3 million alerts were sent out in

the initial 10 months of the programme. The vast majority of copyright alerts delivered

to account holders – more than 70% – occurred at the initial educational stages, with

less than 3% of the alerts sent occurring at the final mitigation stage. Only 265

challenges were filed, and only 47 were successful (generally due to the “unauthorized

use of account” defence), which is to say that, from the 1.3 million alerts, there has not

been a single instance where an invalid notice was issued.

(b) In the UK, the implementation of the graduated response scheme experienced long

delays and appears to have not happened at the time of writing. The UK scheme, once

implemented, will be as follows. At first, the copyright owner will send the ISP a

copyright infringement report, which includes the IP address associated with the illegal

file sharing. The ISP will then send a warning notice to the subscriber. If the subscriber

is issued 3 warnings within a 12-month period, their IP address is to be placed on the

ISP’s Copyright Infringement List. Copyright holders can request a copy of the list

once each month. The list does not reveal any identifying information about the

subscribers apart from their IP addresses. If a copyright owner may approach a Court

for an order requiring the ISP to reveal the identity of copyright infringer. Subscribers

can challenge a notice (at the cost of £20 that is refunded if the challenge is successful.)

(There have been reports of an attempt to negotiate a voluntary scheme, the alleged

terms of which may have been leaked to the media; however, there is much uncertainty

about whether the terms accurately resemble those negotiated, as well as their current

status.)

(c) In Ireland, a graduated response scheme is the product of an agreement between the

ISPs and the copyright owners. When a copyright owner sends the ISP a notice

regarding a specific IP address engaged in illegal file sharing, the ISP must contact the

subscriber in writing as well as by telephone and browser pop-up windows to inform

them that their IP address has been detected as infringing copyright, that such acts are

illegal, and where they can find legal alternatives. If the subscriber continues to

infringe, they are sent a second warning letter, making it clear that if they continue,

their internet access will be suspended for 7 days. If the subscriber continues to

infringe, the internet access is suspended for 7 days. If following reconnection, the

subscriber continues to infringe, internet access is suspended for 12 months.

(d) In France, until 8 July 2013, rights-holders would make an allegation of infringement

to a government agency, the Hadopi Agency, which would review the allegation and

verify ownership. Thereafter, the Agency would decide whether to contact the

subscriber via his or her ISP, warning the subscriber that his or her internet access

should not be put to infringing use. The notice was required to alert the subscriber to

the possible consequences of continuing infringement as well as information about

legitimate offerings and the impact of infringement on copyright owners. If a second

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allegation was made within six months, the Agency could send another notice. If any

additional allegation were made within a year of the second notice, the Agency would

investigate the matter and prepare a report advising whether the subscriber’s

connection should be suspended. The matter could subsequently be referred to a

prosecutor, and then be taken before a judge for sanction – which carried a maximum

penalty of €1500 and 12 months’ suspension. Following 8 July 2013, the fine remains

the only penalty, and the option to suspend an internet service has been scrapped.

(e) In New Zealand, a copyright owner will contact what is referred to there as an Internet

Protocol Address Provider (IPAP) to make an infringement allegation. The IPAP must

then identify the subscriber and issue an appropriate notice within seven days. Three

notices are issued if necessary – a “detection notice”, a “warning notice” and then an

“enforcement notice”. Each notice must include the name of the complainant rights-

holder, details of the relevant infringement, an explanation of the consequences, and

instructions for challenging the notice should the recipient wish to do so. IPAPs are not

obligated to send further notices if infringing conduct occurred with 28 days of a

previous notice. Detection and warning notices expire nine months after being issued,

and enforcement notices are valid for a “quarantine period” of 35 days. Once expired,

the rights-holder must start again with a detection notice for a new allegation of

infringement. A subscriber has 14 days to challenge the notice, and the rights-holder

has 28 days from then to reject the challenge. Failure to reject the challenge within 28

days is deemed to be acceptance. After an enforcement notice has been issued, the

IPAP will provide a copy of it to the copyright owner to seek a penalty, which currently

is limited to financial redress in the Copyright Tribunal, and capped at a maximum of

NZ$15,000. Although disconnection of the internet service has been imagined in the

legislation, such recourse is currently unavailable.

(f) In South Korea, where an alleged infringer has received three or more warnings, the

Korea Copyright Commission will deliberate on what, if any, penalty is warranted. If

one is, the matter is referred to the relevant Minister who may order suspension of the

account. A subscriber’s first suspension must be for less than one month, the second for

more than one but less than three months, and the third for more than three but less

than six months. Separately, the Korea Copyright Commission can make

recommendations to ISPs, in particularly flagrant cases of infringement, for the ISP to

voluntarily suspend accounts (as well as issue warnings or delete infringing copies).

While the recommendation is not binding, there are fewer formal requirements in

relation to reasonable steps necessary for suspension. In particular, there is no three-

notice protocol required (although as a matter of practice, multiple warnings are given.)

(g) In Taiwan, the specifics of the graduated response scheme are still being worked out.

However, it appears that the when a copyright owner notifies an ISP of an IP address

that has infringed its copyright, the ISP is then required to send a warning to the

subscriber. If the subscriber is warned three or more times, their internet access is

restricted (although it is unclear how, or to what extent.) The ISP is not required to

provide the identity of the subscriber to the copyright owner unless the subscriber files

a counter-notice, claiming they have a right to access the content. Once the copyright

owner knows the identity of the subscriber, in addition to whatever actions the ISP

might take against the subscriber, the copyright owner may also pursue a claim against

the subscriber directly.

Proposal 1 – Extended authorisation liability (questions 1-5)

34. APRA AMCOS strongly agrees with the motivation underpinning the first proposal,

and shares the view that “extending authorisation liability is essential to ensuring the

existence of an effective legal framework that encourages industry cooperation and

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functions as originally intended, and is consistent with Australia’s international

obligations.”8 However, to the extent that industry cooperation is dependent on the

various parties being able to negotiate their respective rights and obligations, the

current statutory framework impedes industry cooperation by granting ISPs undue

leverage.

35. There are many different legitimate motivations for extending liability to ISPs.

Primarily, extending liability to ISPs can be best justified by the trinity of legitimate

copyright objectives: reducing infringements, compensating creators and promoting

creation, art and knowledge. APRA AMCOS is of the view that the objectives are

interrelated: the less infringing services abound online (or the more that infringement is

disincentivised), the more consumers will consume licensed services. APRA AMCOS

does not contend that each instance of piracy would be substituted by a commercial

transaction; however, the more consumers consume licensed services, the more

creators will be rewarded and the more that creation, art and knowledge will be

promoted.

36. The effectiveness of the scheme lies in designing a scheme that is not just principled

but workable. Ideally, the trinity of legitimate copyright objectives should together

dictate the design of the proposed scheme. However, APRA AMCOS would prefer a

scheme that is both principled and sustainable, rather than one that is merely the

former. For that reason, APRA AMCOS has worked with Music Rights Australia to

propose a scheme which includes concessions by copyright owners for the sake of

achieving a scheme that will avoid unnecessary controversy, public backlash, and

tension with other parties to the scheme which are likely to cause an Australian

graduated response scheme to suffer the same difficulties as those suffered in some

other jurisdictions.

37. As a matter of principle, APRA AMCOS does not consider that content owners should

contribute to funding the ISPs’ graduated response. The starting-point to the discussion

about extending liability to ISPs for authorising liability must be that ISPs conduct a

business that is responsible (if secondarily) for the infringement of vast amounts of

copyright rights. But for legal protections that were granted to ISPs in political

deference to developing a strong digital sector, the ISPs would be held liable for

authorisation of copyright infringement.

38. Otherwise, APRA AMCOS respectfully adopts the submissions of Music Rights

Australia in response to Questions 1 to 5 in the Discussion Paper.

Proposal 2 – Extended injunctive relief to block infringing overseas sites (question 6)

39. APRA AMCOS strongly agrees with the motivation underpinning the proposal to

extend injunctive relief to block infringing overseas sites, and consider the proposal to

be essential to safeguarding the important copyright interests of Australian content

owners.

40. APRA AMCOS considers that entrusting a Court with making these decisions on the

evidence before it is an appropriate way of implementing a scheme that removes

material from the web. To be sure, approaching the Court for such orders is expensive

and onerous, which burdens content owners and makes such approaches necessarily

less frequent. However, it remains the most suitable means of achieving this important

aim.

8 Discussion paper, p3.

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Australia in response to Question 6 in the Discussion Paper.

Proposal 3 – Extended safe harbour scheme (question 7)

42. APRA AMCOS is not clear about the motivation for this amendment, and respectfully

suggests that further clarity be provided for the sake of this discussion.

43. Regardless, one of the key aspects to the successful execution of the safe harbour

scheme is the adoption and implementation of an industry code. Currently, section

116AH(1) of the Act requires that any ISP seeking to rely on the safe harbour

provisions must adopt and reasonably implement a policy that provides for termination,

in appropriate circumstances, of the accounts of repeat infringers. It also requires ISPs

to comply with a Code, if one is in force. The difficulty that content creators have

encountered is that there is no requirement in the Act for the ISP industry to agree to a

Code, which means that ISPs are enjoying a loophole provided in the legislation so to

not have to comply with the standards intended by the legislators. This loophole will

need to be addressed in conjunction with any proposal to extend the scope of the Have

Harbour provisions.



Building the evidence base (question 8)

45. APRA AMCOS agrees with the premises underlying the question that measuring the

success of any scheme designed to address online copyright infringement is both

important and difficult. As referred to above, APRA AMCOS considers the trinity of

legitimate copyright objectives (reducing infringements, compensating creators and

promoting creation, art and knowledge) to be the best measures of any such scheme.

46. With respect to measuring a reduction in infringements, the same process undertaken in

the study that determined that Australian consumers are the worst offenders of online

copyright material would be an appropriate gauge. A sample of various popular

television shows, songs, books and films should be monitored in various P2P networks,

and record the number of downloads taking place in Australia. The trends would be

easily charted.

47. In the event that a graduated response scheme is implemented, it is equally essential to

record piracy trends in Australia at the onset of the scheme, and follow its progress

through its various developments.

48. With respect to measuring the compensation distributed to creators, APRA AMCOS

publishes these figures as a matter of course. APRA AMCOS is well-positioned to

comment on its revenue trends, and – subject to its confidentiality requirements – will

be able to comment on how the proposed scheme has impacted the compensation

distributed to creators.

Other approaches (question 9)

49. In APRA AMCOS’ experience, much of the difficulty encountered in reducing online

copyright infringement lies in the unique lack of understanding in the community about

copyright. APRA AMCOS has invested enormous amounts of time, effort and

resources to educating the community about copyright, particularly in relation to the

music industry, and has made considerable ground in this respect. APRA AMCOS is

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aware of significant contributions made by other organisations, including Music Rights

Australia and the Australian Copyright Council. APRA AMCOS is also grateful for the

Attorney-General’s Department for creating plain-English resources that are provided

on its website, and to which APRA AMCOS can (and do) refer when dealing with

members of the community who are unfamiliar with copyright regulation. APRA

AMCOS commends the Government for investing in these important resources, and

strongly encourages that this practice continue.



B. Thank you for the opportunity to comment on these proposals. In the event that you require any

further information relating to our submissions, please don’t hesitate to let us know.

BRETT COTTLE AM

CHIEF EXECUTIVE

APRA AMCOS

ONLINE COPYRIGHT INFRINGEMENT DISCUSSION PAPER SUBMISSION...

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