Lobby pushing for Australian piracy crackdown donates millions

When Australian Attorney-General George Brandis provided an example of a film that was a victim of online copyright infringement, it happened to be one produced by a major donor to the Liberal Party.
Written by Josh Taylor, Contributor

As Attorney-General George Brandis looks to clamp down on online copyright infringement, one of the main members of the recently renamed content industry lobby group, the Australian Screen Association (ASA) has been revealed to have donated close to AU$4 million to the Liberal and Labor parties since 1998.

The Australian Screen Association, which until last year went under the name of the Australian Federation Against Copyright Theft (AFACT), represents some of the biggest film studios in the world, including Universal, 20th Century Fox, Disney, Paramount, and Village Roadshow.

The latter was listed as the main litigant in AFACT's case against internet service provider iiNet several years ago, where AFACT tried and failed to hold iiNet liable for its users sharing films over BitTorrent. iiNet had declined to pass warning notices sent from AFACT about users infringing on copyright onto the iiNet account holders. The High Court found that iiNet had no direct power to prevent its customers from using BitTorrent other than deactivating a customer's account, and that the notices AFACT had sent to iiNet were not in a form that iiNet would be in a position to pass onto its users.

Since the ruling in 2012, AFACT, now the ASA, has been lobbying the government for the implementation of a graduated response scheme that would see users hit with warnings when it is alleged that they have been caught infringing, and then punishment for repeat infringers with fines or disconnection as a final resort in some cases. The UK and South Korean models have the option to suspend user accounts, while the New Zealand system can see users fined up to NZ$15,000.

When Brandis announced in a speech to the Australian Digital Alliance Forum on Friday that the Australian government is considering implementing such a scheme, he highlighted one particular Australian movie that he said has been a victim of online piracy.

"The Great Gatsby, Australia's most successful film at the local box office last year, is now centre stage after its haul of 13 AACTA Awards and an Oscar nomination," Brandis said.

"Unfortunately, the success achieved by The Great Gatsby can lead to piracy of the film, placing the sustainability of our screen industry at risk."

The Baz Luhrmann film adaptation of F Scott Fitzgerald's classic novel made a reported $351 million in the box office for Village Roadshow and the other companies involved in the production of the film. What Brandis did not mention, however, is that Village Roadshow is also a major donor to the Liberal Party.

An analysis by ZDNet of the annual donor returns listed on the Australian Electoral Commission (AEC) of reported donations to the political parties shows that since 1998, Village Roadshow has donated close to AU$4 million in total to the Labor and Liberal parties both federally and in the state branches.

The Liberal Party has received slightly more from the company, at AU$2.07 million, while Labor received AU$1.89 million in donations. The biggest donations from Village Roadshow came in the 2010-11 financial year, around the time of the 2010 federal election, and when AFACT's case against iiNet was in the appeal stage. In that year, Village Roadshow donated a reported AU$422,336 to Labor and AU$446,888 to the Liberal Party.

In the last financial year, Village Roadshow donated AU$22,000 to Labor and AU$315,004 to the Liberal Party. Donations made in the three months up to September's election will not be revealed until February next year.

ASA spokesperson Neil Gane told ZDNet that the ASA "fully supports the measures proposed by Senator Brandis last week", in particular around blocking copyright-infringing websites and the graduated response. 

"The judicial process enabling the creative industry to seek injunctive relief against identified rogue sites without any need for issues of liability to be faced by ISPs for blocking the identified sites has been proven to be an effective technical solution," he said.

"Contrary to much misinformation such educational schemes have proven to be effective. By way of example, in France the costs are shared between government, ISPs and rights holders and have been in operation for nearly 24 months. Results have been positive resulting in a reduction in online file sharing plus an increase in digital sales of content," Gane said.

He rejected a recent research paper that showed three-strikes had been ineffective in deterring copyright infringement in other countries where it had been developed.

"The premise of [the report's] findings is that if a graduated response/copyright alert system is not 100 percent effective it is therefore ineffective," he said.

"The efficacy and success of an educational notice scheme should be more nuanced than that. There are a number of variables that could be considered not least a reduction in peer-to-peer traffic and an uptick in traffic/revenues to legal services."

Gane pointed to a 2012 study into France's own graduated response scheme that showed an increase in sales in iTunes in some categories after the scheme had been introduced.

Report author Rebecca Giblin told ZDNet that Gane had misinterpreted her report.

"In fact, the study exhaustively evaluates all of the available evidence regarding the extent to which each graduated response regime worldwide achieves any of copyright's aims: reduced infringement, increased legitimate markets and improved access to knowledge and culture," she said. "Ultimately, it finds remarkably little evidence that graduated response results in improved outcomes in any of these areas.

"Contrary to Gane's claims, a recent major report commissioned by the French government found that, even if the French graduated response law had brought about some reduction in P2P infringement, that traffic had been diverted to other infringing sources rather than to the legitimate market."

 Gane declined to comment on Village Roadshow's donations, instead directing ZDNet to Village Roadshow.

As Brandis flagged in his speech, one of the main issues of contention is the funding of such a scheme. Australia's ISPs are reluctant to bear the cost of enforcing the copyright of content owners without compensation. Optus' vice president of regulatory and corporate affairs, David Epstein, said that the film studios have yet to step up with a proposal on how they would help fund a graduated response

"We appreciate the attorney-general has to balance a range of views when dealing with issues of copyright infringement. We welcome his recognition of the principle of technological neutrality. But there has to be a willingness from the whole industry to work through proposals and for wide adoption, or else they won't work," he said.

"The people who need to step up are those that make money from distributing content over carrier networks, but we have not seen a willingness from them fund any models that try to deal with the spread of copyright infringement."

Reaction to the speech from the attorney-general has been mixed. The speech followed the Australian Law Reform Commission's recommendation that Australia's copyright laws be overhauled with the inclusion of a fair use regime that would allow for a number of defences against copyright infringement on the grounds of fair use, such as caching, research, news reporting, and non-commercial or private use.

Brandis said he remains to be convinced that a fair use scheme is required in Australia, but the Australian Digital Alliance and the Communications Alliance released a joint statement highlighting that fair use would help encourage innovation in Australia.

"If the government is serious about encouraging innovation, it will commit to these reforms. Some of the biggest innovations coming out of places like Silicon Valley aren't even legal in Australia under current laws," ADA executive officer Trish Hepworth said.

"Fair use will future-proof our laws in a time of rapid technological changes. We call on the government to follow through on the ALRC's recommendations," Communications Alliance CEO John Stanton added.

"Under current laws, basic functions for ISPs such as caching and search-engine indexing are illegal. This means data needs to travel further to reach Australian consumers, adding to costs and therefore bills. Australia's ISPs want to be world leaders in offering consumers the best and most current services. However, our broken copyright laws make this close to impossible."

Google had said in a submission in 2012 to the copyright review that it would not have been able to set up its search business in Australia under Australian copyright law.

The Media, Entertainment and Arts Alliance (MEAA) union for media workers, including journalists, said that the proposed fair use regime is vague and open to litigation.

"Although the exception outlined in the ALRC report does offer some protections for copyright holders, including an express statement that 'fair use' of copyrighted material should not infringe copyright, the proposed list of factors remain vague, complex, and open to interpretation," MEAA federal secretary Christopher Warren said.

"This will inevitably lead to a boon for lawyers and severely undermine the sustainability of hard-working creative Australian businesses. We fear that the benefits of such an exception would be far outweighed by the difficulties in identifying what fits into the category of fair use."

Warren added that the arrival of new technologies doesn't take away the right for content creators to be paid for their work.

"The argument that the digital economy should transform created works into a free-for-all business model is a falsehood that actually undermines, stifles, and erodes creativity — and ultimately harms consumers," Warren said.

It is expected that Shadow Communications Minister Jason Clare will today announce Labor's support for a fair use regime in a speech to the Tech Leaders conference in Queensland.

Disclosure: Josh Taylor is a member of the MEAA.

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