Thursday, 09 April 2015 13:41

Choice and ACCAN warn against 'speculative invoicing' Featured

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Consumer group Choice says the new copyright code fails to include simple safeguards to stop unfair fines, or ‘speculative invoicing’.

The Australian Communications Consumer Action Network (ACCAN) agrees.

Choice says that the new code, if registered, will leave consumers vulnerable to copyright trolls and ‘pay-up-or-else’ threats.

”The code sets up a system that will force Internet Service Providers to hand over customer details to rights holders, who will have free rein to use this information to launch court action, or as we’ve seen overseas, send threatening letters demanding thousands of dollars in ‘fines’,” says Choice’s Erin Turner.

“Just yesterday we saw the outcome of a legal process initiated by Dallas Buyers Club’s copyright owners to access the contact details of alleged pirates in Australia. This was lengthy, and if Dallas Buyers Club wants to send bullying letters demanding payment, they’ll need to get the judge’s okay first.

“But under the proposed Copyright Code this process will be eliminated and replaced with a rubber stamp. There will be no-one checking to make sure rights holders aren’t seeking to intimidate and bully Australians who may have done nothing wrong.

“This code should be amended to better balance the rights of both copyright owners and consumers, by simply refusing to allow rights holders who send these ‘pay-up-or-else’ letters from participating.

Turner said Choice wants an industry code to include appropriate community safeguards, including:

  • A punishment for rights holders sending ‘pay-up-or-else’ letters;
  • Limits on the total amount of damages that can be sought by copyright owners; and
  • A requirement for rights holders to tell consumers where they can legally access the content that they allegedly pirated.

“It is really disappointing to see that this common-sense approach to ensuring fairness has not been incorporated into the final version of the code, which infringes on consumers' rights and does nothing to address the reasons people pirate,” said Turner.

“Availability, timeliness and affordability are the keys to reducing piracy. If rights holders are serious about this, they would be making their films and TV shows available in Australia faster and at a fairer price, instead of coming up with a new way to attack their customers.”

ACCAN has also issued a statement saying it is concerned that the new Copyright Code will make it easier for rights holders to do speculative invoicing.

ACCAN represented consumers on the industry group that developed the new industry Copyright Code. The code includes a ‘copyright notice scheme’ that will see consumers sent infringement notices if they are alleged to have downloaded pirated material. In its submission to Communications Alliance, ACCAN has outlined significant concerns in the Code’s consumer safeguards.

“Speculative invoicing has occurred in the US, Canada and UK where consumers have been sent intimidating letters demanding compensation for claims of illegal file sharing,” said ACCAN CEO Teresa Corbin. “The Dallas Buyers Club Federal Court decision is worrying because in the future Australian consumers may be sent threatening letters shaking them down for money or face the threat of legal action.”

To avoid this intimidating practice, ACCAN has proposed that rights holders who engage in speculative invoicing be barred from using the copyright notice scheme. “Overseas there have been cases where consumers have been intimidated into paying up to $9,000 in out of court settlements to appease copyright holders,” said Corbin.

“ACCAN urges any consumers who receive a speculative invoice to seek independent legal advice before taking any action.”

Corbin said ACCAN has further concerns regarding the cost, which is still unknown, and questions the benefits of the scheme.

“Under the code ISPs will be forced to keep evidence of online copyright infringement and send infringement notices to customers. The cost of running the scheme will be passed on to consumers through higher Internet bills.

“We are calling on the ACMA to subject the scheme to a cost benefit analysis by the government Office of Best Practice Regulation and ensure it meets appropriate community safeguards.”

Corbin said ACCAN has further concerns regarding the security of consumer information that will be collected under the code. “This information will be a treasure trove to hackers who may illegally access the information and compromise consumer privacy.

“here are no provisions in the code forcing ISPs to delete information once it is no longer useful. This is a real concern, given the code requires ISPs to store information about download history and potentially illegal activities.

“Ultimately market solutions that provide affordable, available content to Australian consumers will have the biggest impact on piracy,” said Corbin.

“Research commissioned by consumer group Choice has found that the top reasons consumers download pirated content are all related to a lack of access to affordable content.”


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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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