Australia's AI Copyright Exemption Proposal Worries Authors

The Australian Productivity Commission has proposed a significant amendment to the nation’s copyright law, suggesting a “text and data mining” exception that would legalize the use of copyrighted Australian works for training artificial intelligence (AI) models. This recommendation, detailed in its interim report “Harnessing data and digital technology,” aims to incorporate AI training into the existing “fair dealing” exceptions under the Copyright Act.

The Commission’s primary justification for this move is economic, forecasting a potential A$116 billion boost to the Australian economy over the next decade, driven by advancements in AI. This proposal, however, surfaces despite the acknowledged reality that large language models (LLMs) have already been trained on vast quantities of copyrighted material, frequently in breach of current copyright law. A notable incident in March saw numerous Australian authors express outrage upon discovering their works, including those by former Prime Ministers John Howard and Julia Gillard, were part of a pirated dataset utilized by Meta to train its AI systems.

This proposed exception has ignited strong opposition from Australian authors, publishers, and their representative organizations. Bodies such as the Copyright Agency, the Australian Society of Authors (ASA), and the Australian Publishers Association contend that such a change would “preference the interests of multinational technology companies at the expense of our own creative industries.” They argue that copyright is fundamental to authors’ livelihoods, with Australian writers currently earning an average of around A$18,500 annually from their writing. A recent study further indicated overwhelming opposition among writers to the use of their work for AI training without appropriate compensation.

Lucy Hayward, CEO of the ASA, voiced the industry’s concern, stating that a text and data mining exception would effectively grant tech companies “a free pass to use [authors’] work to train artificial intelligence models – and profit from it – while Australian creators get nothing.”

While acknowledging the potential for AI companies to use copyrighted materials without providing appropriate compensation, Stephen King, one of the commissioners leading the inquiry, highlighted the broader objective of fostering the development of AI-specific tools that utilize such material. The report asserts that the provision “would not be a ‘blank cheque’ for all copyrighted materials to be used as inputs into all AI models.” However, critics view the creation of greater legal leeway as tacitly endorsing practices that are currently unlawful. They draw an analogy to someone driving a rental car without payment or paperwork, only for the government to subsequently change the law to legalize such actions, rather than prosecuting the initial infringement.

This is not the first instance where the Productivity Commission has put forth recommendations that the local publishing industry viewed as detrimental. In both 2009 and 2016, the Commission recommended removing parallel importation restrictions (PIRs). These regulations restrict the sale of foreign editions of a book in Australia for 90 days if a local company publishes a local edition. Local publishers argued that removing PIRs would disadvantage them against overseas competitors, potentially leading to some cheaper books but critically eliminating a major revenue stream. They explained that sales from local editions of bestsellers often subsidize the rest of their local publishing programs. Author Richard Flanagan famously likened the Productivity Commission in 2016 to “a deranged hairdresser insisting their client wears a mullet wig” in response to these proposals.

The benefits of local editions are evident in past examples, such as Text Publishing producing local editions of Barack Obama’s memoirs and being the first to publish Elena Ferrante in Australia. Similarly, Scribe’s Australian edition of Canadian neuroscientist Norman Doidge’s The Brain That Changes Itself sold over 100,000 copies in Australia and New Zealand within a few years, helping to fund their broader local publishing efforts.

Earlier, in 1995, when it was known as the Industry Commission, the body recommended ending the Book Bounty, a subsidy that supported local book printing. The Commission argued that overseas printing was cheaper and the model outdated. Since then, Australia’s printing industry has significantly contracted, effectively leaving only two major local printers, Griffin and McPherson’s. This duopoly raises concerns about reduced competition and potentially higher prices. Furthermore, critics argue the Commission overlooked the substantial transaction costs of overseas printing, which adds several months to production schedules. This delay means local books take longer to publish, and some time-sensitive works might not be published at all without a competitive local printing industry.

As the world’s 13th largest economy, Australia’s legislative decisions can establish international precedents. Allowing “sweetheart copyright deals” domestically could encourage other countries to adopt similar legislative choices. Australia has an opportunity to lead in areas such as Indigenous Cultural and Intellectual Property, rather than simply following global trends. The choice, therefore, lies in whether to freely permit the use of cultural products for AI training or to signal, both domestically and internationally, a strong commitment to valuing its cultural products and creators.