Australia's Productivity Commission Proposes AI Copyright Exemptions, Sparking Controversy

The Productivity Commission is floating AI copyright exemptions - with worrying implications for Australian authors and publishers

Australian National University provides funding as a member of The Conversation AU. In an interim report released overnight, Harnessing data and digital technology, the Productivity Commission has floated a text and data mining exception for the Australian Copyright Act. This would make it legal to train artificial intelligence large language models, such as ChatGPT, on copyrighted Australian work. AI training would be added to the list of "fair dealing" exceptions already existing in the Copyright Act. Why? The Productivity Commission estimates a potential A$116 billion over ten years flowing into the Australian economy, thanks to AI. Of course, this comes after large language models have already "trained" on masses of Australian copyright material, breaching copyright law. In March, many Australian authors were outraged to find their works included in a dataset of pirated books used by Meta to train their AI systems (including books by former prime ministers John Howard and Julia Gillard). Writers, publishers and their industry bodies oppose any such exception - which would "preference the interests of multinational technology companies at the expense of our own creative industries", according to the Copyright Agency. And this isn't the first time the Productivity Commission has proposed changes that would harm Australian publishers. Copyright is how authors earn a living Sophie Cunningham, a writer, former book publisher and chair of the Australian Society of Authors (ASA), pointed out most writers "don't receive wages but they do have copyright". The Australian Publishers Association is "deeply concerned" by the exception. ASA CEO Lucy Hayward says, A text and data mining exception would give tech companies a free pass to use [authors'] work to train artificial intelligence models - and profit from it - while Australian creators get nothing. The ASA, too, opposes the exemption. On average, Australian writers earn around $18,500 per year from their writing practice. A recent study found that they are overwhelmingly opposed to their work being used to train AI models. Stephen King, one of two commissioners leading the inquiry, said: The obvious harm is that an AI company may use copyright materials without providing appropriate compensation. On the other side, we want the development of AI-specific tools that use that copyrighted material. The report claims the provision "would not be a 'blank cheque' for all copyrighted materials to be used as inputs into all AI models". But creating greater leeway in Australian laws can be read as tacitly endorsing currently unlawful practices. Imagine grabbing the keys for a rental car and just driving around for a while without paying to hire it or filling in any paperwork. Then imagine that instead of being prosecuted for breaking the law, the government changed the law to make driving around in a rental car legal. This gives you an idea of what is being proposed. Unproductive suggestions This is not the first time the Productivity Commission has shown little regard for the local publishing industry. In 2009, it recommended the government remove parallel importation restrictions - a regulation that says if a local company publishes a book, no foreign editions of the same book can be sold here for the following 90 days. Local publishers at the time argued removing the restriction would put them at a disadvantage compared to overseas publishers. While it might result in some cheaper books, it would also remove a major revenue stream for local publishers, whose local editions of bestsellers underwrite the rest of their local publishing program. When the argument resurfaced in 2016, author Richard Flanagan said, "The Productivity Commission is like a deranged hairdresser insisting their client wears a mullet wig." The benefits of local editions of foreign titles for local publishers have long been clear. Text Publishing produced local editions of Barack Obama's memoirs in the year he ran for his first presidency and first published Elena Ferrante in Australia. Scribe's edition of Canadian neuroscientist Norman Doidge's The Brain That Changes Itself sold over 100,000 copies in Australia and New Zealand within a couple of years, helping fund their local publishing program. In 1995, when the commission was called the Industry Commission, it recommended the end of the Book Bounty, a subsidy that supported local printing of books. The Industry Commission's argument was that overseas printing was often cheaper and the model was outdated. Since then, Australian printing has effectively dwindled to just two printers: if you look on the imprint page of most Australian books, you will see either Griffin or McPherson's - if they were printed locally. So much for productivity - as seen with Coles and Woolworths, a duopoly risks less competition and higher prices. Similarly, the Industry Commission did not give much regard to the high transaction costs of overseas printing. Overseas printing adds several months to the production schedule, meaning local books now take longer to publish. Without a competitive local printing industry, and margins that push printing offshore where it is cheaper, it's possible some time-sensitive books won't be published at all. Australia can lead, not follow Australians may be accustomed to thinking of ourselves as small players on the international stage, but we are the 13th largest economy in the world. Our actions set precedents that other countries follow. Making sweetheart copyright deals here could lead to other countries copying our legislative choices. Australia is increasingly recognising the importance of Indigenous Cultural and Intellectual Property - and some of our institutions are working to develop best practice. Australia can be a leader in this space, not a follower. We can choose to hand over the keys - or we can signal, locally and around the world, that we value our cultural products and creators.

Arts and media groups demand Labor take a stand against 'rampant theft' of Australian content to train AI

Arts, creative and media groups have demanded the government rule out allowing big tech companies to take Australian content to train their artificial intelligence models, with concerns such a shift would "sell out" Australian workers and lead to "rampant theft" of intellectual property. The Albanese government has said it has no plans to change copyright law, but any changes must consider effects on artists and news media. The opposition leader, Sussan Ley, has demanded that copyrighted material must not be used without compensation. "It is not appropriate for big tech to steal the work of Australian artists, musicians, creators, news media, journalism, and use it for their own ends without paying for it," Ley said on Wednesday. In an interim report on "harnessing data and digital technology", the Productivity Commission set out proposals for how tech including AI could be regulated and treated in Australia, suggesting it could boost productivity by between 0.5% and 13% over the next decade, adding up to $116bn to Australia's GDP. The report said building AI models required large amounts of data, and several stakeholders in the field, including Creative Australia and the Copyright Agency, had "expressed concern about the unauthorised use of copyrighted materials to train AI models". The PC suggested several possible remedies, including expanding licensing schemes, or an exemption for "text and data mining" and expanding the existing fair dealing rules, which the commission said existed in other countries. The latter suggestion prompted fierce pushback from arts, creative and media companies, which raised alarm their work could be left open for massively wealthy tech companies to use - without compensation or payment - to train AI models. Such moves could undermine licensing deals currently being negotiated by publishers and creatives with big tech companies. It would also raise questions about the viability of the news media bargaining incentive, where news publishers strike commercial deals with major social media networks for the use of their journalism online. The Australian Council of Trade Unions accused the Productivity Commission of having "swallowed the arguments of large multinational tech companies hook, line and sinker", warning its approach would do little to help working Australians. "The report's extensive canvassing of the possibility of a text and data mining exemption opens the door to legitimising the rampant theft of the creative output of Australia's creative workers and of Indigenous cultural and intellectual property," the ACTU said. Joseph Mitchell, the ACTU assistant secretary, said such an exemption would create a situation where "tech bros get all the benefits of the new technology and productivity benefits are not fairly shared". Apra Amcos, Australasia's music rights collecting agency, and the National Aboriginal and Torres Strait Islander Music Office said they were disappointed at the commission's suggestions, raising concerns about such moves "potentially devastating Australia's $9bn music industry". Apra's chair, Jenny Morris, claimed the recommendations would "legitimise what they themselves acknowledge is already widespread theft". The attorney general, Michelle Rowland, who has carriage over copyright law, said further adoption of AI must be done in a way to build trust and confidence. "Any potential reform to Australia's copyright laws must consider the impacts on Australia's creative, content and news media sectors. I am committed to continuing to engage on these issues including through the Copyright and AI Reference Group that our government established last year," she said. Ley, asked about the PC report, said she was concerned about a lack of "guardrails" from the government in responding to AI challenges. "We have to protect content creators ... that work is theirs and it can't be taken without it being paid for," she said. The treasurer, Jim Chalmers, said he believed AI could be "a force for good", but acknowledged risks in the expanding technology. "The only way to make our people and workers and industries beneficiaries is if we treat AI as an enabler, not an enemy of what we want to see in our economy," he told a press conference in Parliament House. He pointed out that copyright laws apply in Australia, which he said was in contrast to some other countries, and that the government was not seeking to change those laws. The arts minister, Tony Burke, pointed to a submission to the review from Creative Australia, which he said "makes clear that with respect to copyright and labelling, there needs to be consent, transparency and remuneration". The Australian Publishers Association raised fears about authors, researchers and publishers having their work used without permission or compensation, which it said would undermine local publishing, as well as federal government cultural policy. "We support responsible innovation, but this draft proposal rewards infringers over investors," said Patrizia Di Biase-Dyson, APA's CEO. "We reject the notion that Australian stories and learning materials - that shape our culture and democracy - should be treated as free inputs for corporate AI systems." The Copyright Agency also opposed the text and data mining exemption, saying it would negatively affect creators' earning capacity. "The push to water down Australia's copyright system comes from multinational tech companies, and is not in the national interest," said CEO Josephine Johnston. "If we want high-quality Australian content to power the next phase of AI, we must ensure creators are paid for it."

Australia's potential surrender of creative content to tech giants for free is shocking. Labor must decide where it stands | Josh Taylor

Tech companies have devalued the work of creative industries for years. The latest iteration of this is their insistence the AI models they plan to make lots of money from need the labour of all of human creation for free in perpetuity. It's just surprising that the Productivity Commission appears to have bought into the argument - and caught the Australian government off-guard. The Productivity Commission's view on AI trained on the copyrighted works of others without compensation, published Wednesday, is that the horse has already bolted for big tech companies - that providing a text and data mining (TDM) exception in copyright law would not change much, but should be worth considering. The commission stated that AI models, trained overseas on unlicensed copyrighted materials, are already used in Australia by larger institutions and a TDM exception is unlikely to change this. The argument is that providing an exception could allow smaller local institutions to train their own models. That argument would carry more weight if it wasn't the giants of Google, Meta and Atlassian that have so far argued for carte blanche AI access to all available human data. As the UK recently experienced, there is already almighty pushback from news, film, music and TV companies, as well as authors and publishers. This is the case for essentially any industry that might now be suddenly expected to hand over its labour for free to the same very large tech companies that spent millions of dollars to arguably seek favourable AI regulation (ie very little) from the Trump administration. Music industry bodies in Australia have said a TDM exception here would "legitimise digital piracy under guise of productivity". It is hard not to view the push from tech companies cynically given recent political donations and the current AI job-hiring arm's race. Companies are reportedly offering up to US$100m pay packets for AI researchers in a highly competitive jobs market, while at the same time crying poor when it comes to paying for the data that will make those AI models useful. Many in media have been through waves of redundancies because tech companies promised the rivers of gold would return with a pivot to on-platform video, hopes suddenly dashed when Facebook deprioritised video. When the Coalition government forced Meta and Google to negotiate with publishers for payment for their content, Meta temporarily removed news from its platforms in Australia, before eventually coming to the table. When those deals came up for renewal, Meta had turned the tap off for news content appearing in people's feeds, and argued news wasn't important for the platform anymore. The attitude to training AI models on the work of others seems no different. The claim that the models are already trained and it is therefore too late to do anything about it ignores the question of happens next. News companies - including the Guardian, which has opposed the exception proposal in the UK - will remain a vital resource that AI will need to train on, to respond to growing user demand for the latest information. But allowing AI to access to that offers very little in return to those companies if they aren't paid. AI summaries in Google search results mean people now click through less and less to find the details in a news story. A recent study suggests a site previously ranked top in search results could see a 79% drop in clickthroughs. Cloudflare - the internet infrastructure company that has launched a way to block AI crawlers from sites unless they pay up - has said the results are even worse in AI chatbots. As of June, Google crawled websites about 14 times for every referral, Cloudflare said, but OpenAI's crawl-to-referral ratio was 1,700:1, and Anthropic's was 73,000:1, Cloudflare said. One can argue sites already do have an option to opt out: by including a "robots.txt" file on their website to say "don't crawl my page". But as Cloudflare points out, that amounts to little more than putting up a rules sign next to the pool. The Albanese government appears to have been caught unaware that an overhaul of copyright law for AI was something tech companies have been pushing for - and something the Productivity Commission appears to be open to. The treasurer, Jim Chalmers, referred questions on it to Tim Ayres, the industry and science minister. Ayres told ABC News Breakfast on Wednesday there were "no plans to make changes" in regards to copyright law. But while the opposition has already come out strongly against the use of copyrighted material without compensation, Labor needs to figure out where it stands. At a time when the government is championing its under-16s social media ban as "world-leading", and with various new regulations facing the tech sector - from child protection, to paying news companies for news, to competition changes for Apple and Google app stores being floated - Australia's potential surrender of all the content of human creation to the tech giants, for free, seems jarring. To argue that without it we will "fall behind" seems to ignore years of regulators struggling to play catch-up with tech companies. Despite Bill Heslop-ian cries of "you can't stop progress" from those who stand to gain the most, they may soon realise it won't last when those whose content they need for AI cannot viably continue to produce it.