Senators Warn AI Copyright Shifts Could Breach Australian Constitution

Coalition senators and the Australian recording industry issued a warning on Friday that proposed changes to copyright law could violate the federal constitution. The concern centers on the potential for the government to be forced to pay compensation to rights holders worldwide if it permits artificial intelligence companies to use copyrighted material without standard licensing agreements.

The debate arises as the federal government prepares to announce a suite of reforms regarding artificial intelligence, including measures for datacenters, energy, and the workforce. The core legal question is whether granting AI firms the right to scrape books, music, and journalism amounts to the government acquiring property without providing just terms.

Ross Cadell, a Nationals senator and member of the federal parliamentary committee on AI, raised the issue during a hearing with the Attorney General's Department. He argued that an opt-out model, which allows companies to use content unless creators actively block it, could create liability for every rights holder globally.

"We could be liable for 'just terms' compensation for acquiring that property for every rights holder on Earth," Cadell said. He warned that such a move could lead to what he described as the biggest compensation rights case in history.

The Attorney General's Department acknowledged the complexity of the issue. A spokesperson, Michelle Rowland, stated that the department was extremely alive to the concerns and remained committed to ensuring that any future changes deliver meaningful control and fair compensation to creatives. However, officials did not directly answer questions about international liability for compensation to foreign rights holders.

Anne Twomey, a leading constitutional expert and professor emerita of law at the University of Sydney, noted that no legislative proposal had yet been formally aired. She explained that the High Court has handled various cases regarding copyright and property acquisition, with mixed outcomes. Twomey stated that granting a new right to AI companies while diminishing the rights of copyright holders could potentially trigger constitutional issues under section 51.

Michaelia Cash, the shadow attorney general, criticized the government's approach, arguing that it should not sell out Australian creators in a rush to attract AI investment. She emphasized that the constitutional question of property rights and their acquisition on just terms is a live issue that the Coalition will examine closely depending on the government's final proposal.

Industry leaders joined the political pushback. Annabelle Herd, CEO of the Australian Recording Industry Association, called any proposal to allow scraping without clear compensation an acquisition of property. She suggested that the government trading away these rights to AI companies for monetization created a clear path to a constitutional challenge.

Chris Maund, CEO of Mushroom Records, argued that current copyright laws were functioning effectively and that AI companies should use existing licensing arrangements. He pointed out that platforms like Spotify were already negotiating AI-related deals. Maund warned that if Australia weakened its laws, AI companies might train in Australia to circumvent stricter copyright laws in other countries.

Prime Minister Anthony Albanese has previously stated that the government would provide the strongest possible protection, calling it theft if creatives were not paid. However, some AI companies, including Anthropic, have suggested an opt-out model due to the difficulty of making individual licensing agreements. Maund noted that international rights holder groups have urged the Labor government to maintain strong copyright protections to support artists and copyright owners.