Australia Warned on AI Copyright Overhaul and Constitutional Risks

Senator Ross Cadell warned that changing copyright law to allow artificial intelligence companies to scrape content could result in the largest compensation rights case in history. He stated that the government could become liable for just terms compensation for every rights holder on Earth if it proceeds with an opt-out model. This warning emerged as the federal government prepares to announce reforms regarding AI, datacentres, and online safety.

The concern centers on Section 51 of the Australian Constitution. This section empowers the Commonwealth to make laws about the acquisition of property on just terms. Critics argue that granting AI firms the right to use copyrighted material without direct licensing effectively acquires that property from creators. If the government lowers these standards, it may owe compensation to owners worldwide.

Anne Twomey, a leading constitutional expert and professor emerita at the University of Sydney, agreed that the issue is potentially a concern. She noted that the complexity depends heavily on how the legislation is drafted. Twomey pointed out that the High Court has handled various cases involving copyright and property acquisition, including those related to video games and cigarette plain packaging, with varying results. She advised the government to be confident about Section 51 applicability before enacting new laws.

Labor is currently reviewing copyright changes as part of a broader AI package. Prime Minister Anthony Albanese has promised the strongest possible protection, calling it theft if creatives are not paid. However, some AI companies have rejected existing licensing agreements, calling them too difficult. Anthropic proposed an opt-out model that would allow scraping unless a rightholder uses digital protections to signal an objection. This approach has alarmed creative industries, who fear their rights are being traded away.

Michaelia Cash, the shadow attorney general, cautioned the government against selling out Australian creators in a rush to attract AI investment. She stated that the coalition is examining the constitutional question of property rights. She emphasized that the prime minister’s own test regarding compensation is a standard the government should be held to.

Annabelle Herd, CEO of the Australian Recording Industry Association, described any proposal to allow scraping as a clear acquisition of property. She questioned what compensation could make up for the fact that rights are being taken and traded to AI companies for their monetization. Herd argued this creates a clear path for a constitutional challenge. Chris Maund, CEO of Mushroom Records, added that current copyright law is working and that companies like Spotify are already making AI deals.

Maund highlighted the international ramifications of changing Australian law. He warned that AI companies could train in Australia to circumvent copyright laws in other countries. International creative industry groups are watching closely and urging Labor not to weaken the law. He noted that while the government has supported the music industry through Creative Music Australia, it feels out of step with copyright owners on this specific issue.

The attorney general’s department acknowledged the issue during a committee hearing with Senator Cadell. Officials described themselves as extremely alive to the concerns. They did not directly answer questions about international liability for compensation to foreign rights holders. A spokesperson for the attorney general, Michelle Rowland, said the government is committed to supporting creatives. She pledged that any future copyright changes will deliver meaningful control and fair compensation.