Last week, the ACCC published its preliminary report in its Digital Platforms Inquiry. After many years of working in the “content space”, it was refreshing to read the ACCC’s description of Google and Facebook’s business models:
Google and Facebook have similar business models: both are reliant on consumer attention and consumer data in order to sell advertising opportunities . 
A major achievement of the 374 page long report is its detailed explanation of how digital platforms actually work. For anyone who still thinks that online search and social media services are free, this will be a revelation. As the report clearly demonstrates, while consumers do not pay for these services in cash, they do pay with their data.
While the report is broad ranging, in this post, I want to focus on what the ACCC had to say about copyright. This is dealt with in Chapter 4: Digital platforms and news media businesses.
Regulatory imbalance in Australian media markets
The report looks at disparities between traditional media and digital platforms in terms of regulation. Copyright is dealt with at 4.5.7 of the report as part of the regulatory landscape.
The report notes that:
Setting aside difficulties in enforcing copyright against digital platforms (discussed in section 4.7), Australian copyright law does not regulate digital platforms differently to media businesses performing the same functions—that is, selecting and curating content, evaluating content based on specific criteria, and ranking and arranging content for display.
Readers will recall that this is consistent with the notion of technological neutrality which lay behind Australia’s Digital Agenda reforms of 2000 (implementing the 1996 WIPO Internet Treaties).
The report canvasses four key issues in relation to copyright material and digital platforms:
- Use of news headlines and snippets. The report notes that headlines are unlikely to be protected by copyright in Australia following the decision in Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd  FCA 984. In relation to snippets, it notes that this will turn on whether the snippet uses a substantial part of the underling literary work and secondly, whether the use of the snippet is a fair dealing for reporting the news. Readers will recall that in the Google Books case, use of book snippets was held to be transformative use under the US doctrine of fair use.
- Unauthorised use of photographs. As the report notes, copyright is likely to be more of an issue when it comes to the use of photographs, unless an exception such as fair dealing for reporting the news can be established. As noted int eh enforcement section of the report, as a matter of practical reality, it is often difficult for individual photographers to enforce their rights against digital platforms.
- Authorisation of copyright infringement. The report then goes on to discuss the potential liability of digital platforms for authorising copyright infringements. In relation to the iiNet decision which held that an ISP was not liable for authorising the copyright infringements of its users, the ACCC said:
The impact of this decision on the likely authorisation liability of digital platforms is not clear, as digital platforms are likely to have more power than ISPs to identify and prevent the infringing behaviour
of their users. 
4. Finally, the report notes that there are no statutory damages in copyright matters, meaning that damages are quantified according to loss. The report notes that “copyright litigation can potentially lead to substantial net loss for the plaintiff” citing the recent case of Pokémon Company International, Inc. v Redbubble Ltd  FCA 154 s an example.
Practical challenges in requesting removal of content from digital platforms
Finally, the report includes a detailed discussion of the practical challenges in trying to enforce copyright against a digital platform.
When it comes to digital platforms, copyright enforcement efforts are largely based on notice and take down regimes. These regimes were designed more than 20 years ago, as part of the Digital Millennium Copyright Act in the US and are poorly equipped to deal with the volume of content on the modern Internet.
While the Copyright Act contemplates a code of conducting relation to the removal of copyright infringing content, no such code is in operation in Australia. The issue is intrinsically linked to the scope of the copyright safe harbour in Australia. The so called “safe harbour” scheme protects internet intermediaries from liability for monetary damages for the copyright infringement of third parties using their networks. It only applies if certain conditions are met. While the scope of the safe harbour was extended by recent amendments to cover educational institutions, libraries and organisations assisting people with a disability as well as ISPs, the safe harbour does not extend to digital platforms such as Facebook and Google. During passage of the Copyright Amendment (Service Providers) Bill 2018 on 27 June this year, Paul Fletcher MP on behalf of the Government noted:
After nearly 15 years of debate on safe harbour reform, this bill represents the first attempt to push beyond the polarised views of stakeholders and will deliver much-needed and beneficial reform. 
It is in that context hat the ACCC’s report makes interesting reading as the Commission tackles how to deal with authorisation liability and the limitation of liability for copyright infringements of digital platforms.
According to the report, the challenges of enforcement include:
- difficulty in pursuing overseas defendants;
- the difficulty of establishing authorisation liability under s 101 (1A) of the Copyright Act;
Ultimately, authorisation is a question of fact and degree to be determined on the facts of each case and it is uncertain whether any digital platform providing a service involving user-uploaded content will be found to have authorised any infringing acts of its users 
- and the low value of likely remedies.
Helpfully, the report goes on to articulate the impact of these challenges.
According to theACCC, the difficulties in copyright enforcement lead to :
- Lower incentives for digital platforms to respond promptly to take-down requests;
- Detriments for content creators, particularly small or individual creators; and
- Detriments for media businesses hosting content online.
While the ACCC is in favour of a broad, technology-neutral review of the media and communications regulatory framework, it is nevertheless proposing to grapple what the lack of a code of conduct for internet intermediaries under the Copyright Act.
Preliminary Recommendation 7
The ACCC proposes to recommend that the ACMA determine a Mandatory Standard regarding digital platforms’ take-down procedures for copyright infringing content to enable effective and timely take-down of copyright-infringing content. This may take the form of legislative amendments to the Telecommunications Act so that the ACMA has the power to set a mandatory industry standard applicable to digital platforms under Part 6 of the Telecommunications Act.
While this recommendation is not altogether new ( a similar proposal arose out of the 2014 consultations on Online Infringement) it is nevertheless controversial. This is not only because of its mandatory nature, but because it shifts the issue from being a matter of copyright regulation, to that of a broader, communications issue. While there may be advantages to this approach, it will clearly be necessary to consider the detail. In particular, the impact on Australia’s international treaty obligations.
According to the ACCC:
Clear industry standards regarding reasonable take-down procedures would also increase the clarity of how authorisation liability operates under the Copyright Act and increase its utility to rights holders.
While this may be so, query whether it would be an adequate proxy for reform of s 101 (1A) of the Copyright Act.
ACCC and copyright
The ACCC’s focus on copyright issues as part of its Digital Platforms Inquiry is welcome. It may be seen as part of a renewed interest in copyright matters given its new Draft Copyright Guidelines and proposals by the Government to abolish the IP exemption in s 51(3) of the Competition and Consumer Act 2010.
The Digital Platforms Inquiry certainly raises a number of important issues for copyright stakeholders to consider. Submissions to the Inquiry are due by 15 February 2019
- p 4 ACCC Preliminary Report
- p 143 ACCC Preliminary Report
- Hansard, 27 June 2019, p 6544
- p 157 ACCC Preliminary Report
- p 160 ACCC Preliminary Report