eBay, ACCC back Optus on copyright in the cloud

Global online auction site eBay and the Australian Competition and Consumer Commission (ACCC) have called for Australian copyright law to be technology neutral in order to avoid problems with cloud storage.

The calls came in submissions to the Australian Law Reform Commission's (ALRC) review of the Copyright Act, initiated by the Australian government earlier this year amidst the courtroom stoush between telecommunications company Optus and the Australian Football League (AFL) and National Rugby League (NRL) over the company's TV-recording service TV Now, which stored recorded TV broadcasts in Optus' cloud.

The telco giant ultimately lost that case, with the court ruling that although the recording is initiated by the user, Optus has a role in making the recording, and is therefore not covered by provisions in the Copyright Act that allow individuals to record broadcasts to watch later, at a time more convenient.

The judgment sparked concerns that any automated personal cloud storage service would potentially be in breach of the Copyright Act.

In eBay's submission to the inquiry, the company said that current Australian law "impedes the development and delivery of cloud-computing services." eBay argued that the TV Now ruling has muddied understanding of the law, and could mean that cloud-computing services in Australia will become limited.

"Existing law seems to have the unfortunate result that for a certain class of offering, the more useful a cloud service, the more likely it will involve copyright infringement by the provider," the online auction site said.

"eBay provides all its services online and is itself a form of cloud service. eBay considers it vital for the development of cloud services, and technological change generally, that the law not discriminate between activities on the basis of the technology that is used carry them out."

The ACCC in its submission said that there is a legitimate issue to be considered as a result of the TV Now case, and said that it supports adopting a "technology-neutral" approach to copyright law.

"While cloud-service providers might be exploiting a commercial opportunity, which relies, in part, on the copying and communicating of copyright material, the ACCC considers that careful consideration needs to be given to whether and, if so, how this operates to the detriment of copyright owners, particularly in terms of the value of the copyright material," the regulator said.

"The ACCC submits that the right to make and store a copy of copyright materials in the provision of a cloud service is distinguishable from the right to use or manipulate copyright materials."

The ACCC said that copyright can act as a disincentive to innovate, and noted that some copyright owners have been slow to innovate, instead opting to attempt to enforce copyright "where consumer expectations and practices have shifted and have led to breaches of copyright."

OzHub, a consortium of cloud providers, including Macquarie Telecom, Fujitsu, and VMware, argued in its submission that the law should not be concerned about whether a service is delivered locally or remotely. OzHub said that global equipment vendors are considering switching off some functionality in network products in light of the TV Now ruling.

"OzHub is aware from private discussions that some global equipment vendors were led to consider whether they will need to disable some functionality in their newest network products in the light of the TV Now decision. We are unaware of how these internal discussions concluded, but the very fact that they were occurring indicates that Australia's reputation as a forward-looking country in matters cloud computing has suffered some damage."

OzHub has argued that copyright law should recognise that cloud storage is a substitute for local storage.

On the issue of copyright infringement occurring online, the ACCC said that the risk of strengthening copyright protections would be that there could be an economic impact in enforcing the new law, and would prevent market-based solutions from emerging. The ACCC lists music-streaming services such as Spotify and JB Hi Fi Now as examples of low-cost cloud-based subscription services that seek to deter online music piracy.

"The ACCC is concerned that the rights of copyright holders should be able to be preserved and protected commensurate with the objectives of providing incentives to create copyright material, but suggests this be balanced against the potential for innovative business practices to meet and develop consumer expectations and practices."

The ACCC also called into question some of the claims made by copyright owners in cracking down on copyright infringement online. For instance, the ACCC questions whether someone who makes an unauthorised copy of content online would have purchased a legal copy of that material in the first place.

To protect search engines and internet service providers (ISPs) that need to cache data locally, the ACCC has also suggested that because there are already temporary reproduction exemptions allowed in the Copyright Act, this could be more clearly defined to include "internet intermediaries" like ISPs.

eBay said that Australian law around caching makes Australia "an unattractive place to locate the facilities that deliver, in particular, data analysis and search services over the internet," and said that companies should be permitted to make digital copies for caching where it has no adverse economic impact on the copyright owner.

eBay also called for an exemption specifically for data mining.

"eBay uses data that has been provided by its users, with their express permission to do so. eBay believes that copyright should not operate to prevent or restrict data mining, and that accordingly, that it would be appropriate to include an exception in the Act that permits the transient reproduction of copyright works where the reproduction is necessary or incidental to lawful data mining," the company said.

The closing date for submissions to the inquiry was last Friday, and the ALRC has so far published 181 submissions from a variety of companies, organisations, government agencies, and individuals.