AI copyright bill risked becoming biggest compensation case in history, senators warn

Ross Cadell, a Nationals senator, warned that Australia could face the largest compensation rights case in history if the government proceeds with plans to let AI companies scrape copyrighted material without full licensing.

The concern centers on Section 51 of the Australian Constitution, which mandates that the Commonwealth acquire property on just terms. Senators and industry leaders argue that weakening copyright laws to benefit AI firms amounts to the government taking property rights from creators without adequate compensation.

The debate has intensified as the Labor government prepares to announce a suite of reforms covering AI, data centers, and online safety. Prime Minister Anthony Albanese has promised the strongest possible protection for creators, stating that it would be theft if they were not paid for their work. However, some AI companies, including Anthropic, have proposed an opt-out model that allows scraping unless rights holders deploy specific digital protections.

Anne Twomey, a leading constitutional expert at the University of Sydney, noted that the issue is exceedingly complex. She said that while the High Court has handled various copyright cases with mixed outcomes, granting new rights to AI companies while diminishing those of copyright holders could potentially trigger constitutional issues.

The Attorney General’s Department acknowledged the risks. Officials told a parliamentary committee on Friday that they were extremely alive to the issue. However, they did not directly answer questions about international implications or liability for compensation to foreign rights holders.

Annabelle Herd, CEO of the Australian Recording Industry Association, stated that any proposal to allow scraping is clearly an acquisition of property. She argued that trading these rights away to AI companies creates a clear path for a constitutional challenge.

Chris Maund, CEO of Mushroom Records, pointed out that changing Australian law could allow AI companies to train on international data while circumventing foreign copyright laws. He noted that international rights holder groups are urging the government not to weaken current protections.

Michaelia Cash, the shadow attorney general, said the government should not sell out Australian creators in a rush to entice AI investment. She emphasized that the constitutional question of property rights is a live issue that the Coalition will examine once the government releases its specific proposals.