Opening statement to Commonwealth Legal and Constitutional Affairs Legislation Committee inquiry into the Copyright Amendment (Online Infringement) Bill 2015

Copyright is a limited quasi-monopoly privilege granted by the state to authors of creative works for a specific and utilitarian purpose, which is to encourage the development of new creative works. This, in my view, is the proper frame in which to consider any changes to copyright law or any new mechanisms to control copyright infringement such as are proposed in the Copyright Amendment (Online Infringement) Bill. To what extent will changes in the law encourage or discourage the creation of new works?

Parliament has a complicated balancing act to perform. Copyright, after all, is not socially costless. It constrains what we might be able to do otherwise with our own property. It prevents us from exercising rights to how we might use our printing presses, musical and television equipment, computers or internet connections. This is not at all to say that the copyright privilege is unjustified or unjustifiable—far from it—but that the utilitarian calculation that society needs to make when considering copyright is whether the benefits of any marginal changes to these privileges outweigh the costs to more fundamental rights like freedom of expression and the right for individuals to use their property and possessions as they see fit. This is why the Howard government’s 2000 Ergas report into intellectual property argued:

Over-compensating rights owners is as harmful, and perhaps even more harmful, than under-compensating them.

Quite apart from any freedom of expression concerns with the copyright bill before parliament, it is not at all clear to me that the social benefits conferred by this new censorship power to block access to websites outweigh the social costs. The Institute of Public Affairs has an in-principle objection to internet censorship on free speech grounds, which I think by now most people will be familiar with, but there is a specific issue I want to raise in the context of this bill.

The bill dramatically lowers the bar for which internet censorship is being proposed. After all, while the previous government’s internet filter proposed to block websites that were hosting violent pornography, child abuse material and so forth, the bill before parliament today proposes censorship on the basis that some websites host copyrighted content. The two censorship proposals are hardly the same scale and, in the case of copyright infringement, we are actually talking about a civil rather than a criminal wrong. The language in the bill is excessively vague. Other submissions have pointed to the undefined and broad consequences, for instance, of the word ‘facilitate’ and warned of possible judicial creep. But I would like to make a final observation.

Parliament, and the political process, is not a venue well-designed to calculate dispassionately the most efficient level of copyright privileges and the most efficient changes to enforcement mechanisms. This is a well-known collective choice issue. It may be possible to draw blackboard diagrams that determine the ultimate copyright rules and level of enforcement. However, unfortunately, policymakers lack the necessary information to do so. Copyright law therefore suffers from what Friedrich Hayek famously called the ‘knowledge problem’. That problem, in our view, presents a strong presumption against further increases in the copyright enforcement powers and an absolute presumption against internet censorship for copyright purposes.