Thursday, March 24, 2011

AFACT appeals against reason

In an earlier post, I predicted that Australian Federation Against Copyright Theft (AFACT) would not appeal its loss in the iiNet case. It turns out that I was wrong. I suspect I was led into error because I was assuming reasonableness would be part of AFACT's decison-making. As I pointed out in the article, AFACT was given a very broad template for an industry negotiated solution to infringement (Emmett, J at [257]), replete with disconnection as a punishment (Emmett, J at [210]) and a warning to iiNet that:
 "... circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements." (Emmett, J at [274])
So AFACT got about as close to a win as you can get without actually winning - including a green-light for a 3-strikes system.

iiNet's reaction [PDF] has been to propose a relatively sensible solution to the problem: an independent body to handle copyright infringement complaints. This model has been met with some interest by other industry players. Although iiNet did not answer some fundamental questions about the eventual status, makeup and powers of such a body, the model was not unreasonable. The Australian Internet Industry Association (IIA) has also proposed an industry code to deal with the issue. So the industry has shown willingness to negotiate a mutually agreeable system for dealing with copyright infringement.

However, nothing is reasonable to AFACT. It's their way or the highway - hence the High Court appeal. It appears that AFACT want the ability to essentially control ISPs by the constant threat of litigation and to cower internet users into accepting AFACT's member's business models on AFACT's terms, regardless of the fact that market forces have already rendered them obsolete. It is this obsolescence that has created the infringement market. As iiNet's CEO stated [PDF]:

"People are crying out to access the studios materials, so much so some are prepared to steal it. A more effective approach would be for the studios to make their content more readily and cheaply available online..."

Unfortunately, this appeal to reasonableness will fall on deaf ears because AFACT has only one model in mind. iiNet has characterised [PDF] this model as the "Hollywood solution":


"The ‘Hollywood solution’ (in very simple terms) involves the employment of private detectives, hired by content owners, to trawl the public internet and gather information . The content owner uses this information to generate notices which are sent to internet service providers . The notices demand that the ISP should terminate the service of a customer subsequently determined by the ISP (not the content owner)"

There are several problems with this approach that were examined by Emmett, J in the AFACT v iiNet case at [257]. Firstly, the quality of the evidence needed to be "cogent and unequivocable"; and secondly, AFACT would need to reimburse the ISP for the costs of investigation and indemnify them against mistaken disconnections.

This is obviously unacceptable to AFACT who want a system were a "mere assertion" is enough to force action and that ISPs bear the total costs of being AFACT's copyright police.  This conclusion can be seen in the push from content producers in the various international treaties such as the TPP, which I have examined in a previous post. It is this conclusion that they want from the High Court.

AFACT and its ilk are particularly keen to shift all costs of the failure of their business models back to ISPs and to consumers, either by litigation or by international treaty. They are not interested in finding an actual solution to the problem of infringement as it might show up their own failures to adapt to the changing market.