Australian Copyright Collective Steals Millions for Lobbying Purposes

A major scandal is brewing in Australia. The Copyright Agency is accused of stealing $15 million in royalties and funnelling the money into a fund used for lobbying.

For a number of countries, the general idea of a copyright collective is pretty straight forward. Whenever copyrighted works are used that requires payment of royalties, a collective is used to collect that money. The collective then, in turn, re-distributes those royalties to content creators such as authors and musicians. The rules and regulations, of course, varies greatly, but that’s the general idea.

For a lot of these collectives, the importance of making sure creators get paid for their work is very important. That’s a big reason why this story is so shocking to a lot of people.

The Copyright Agency, the sole collective for collecting and distributing royalties, is accused of stealing $15.5 million in cash destined for artists. The money was then channelled into a government lobbying fund. In turn, that lobbying effort is reportedly meant to stop any potential new fair use exceptions coming down the pipeline in the government. As the Sydney Morning Herald reports, reaction to this scandal was swift:

Derek Whitehead, chairman of the Australian Digital Alliance, which represents libraries and other users of copyrighted material, said he was concerned to discover that money being collected for orphan works was being used for the bizarre purpose of lobbying the government “to allow the agency to continue to collect the money”.

“As far as we can determine, since 2013 no author or publisher has received any payment at all from the funds received when universities and schools copy orphan works,” he said.

Peter Donoughue, a director of the Copyright Agency for 10 years until 2005 and a former managing director of publisher John Wiley Australia, said it was “pathetic” that the agency was preparing to spend millions defending its access to money it had “never really been entitled to”.

“It’s a reactionary stance,” he said. “Extracting millions from publicly-funded schools and universities for the copying of orphan works has always been wrong. The owners are untraceable. The money should have been returned to the institutions it was taken from. To think it’s been siphoned into a ‘fighting fund’ against those institutions is outrageous.”

At a very basic, yet fundamental level, this represents a massive violation of trust. How do institutes, authors, or film producers trust the royalty system when something like this blows up in the media? In the legal realm, a collective is such an important link in the chain. Without a trustworthy collective, it’s easy to see things getting far more convoluted and archaic when it comes to royalties.

From a PR stance, organizations like copyright collectives do push the message that creators deserve to get paid. Yet, when one of the major advocates of this finds themselves caught doing the exact opposite, it makes it more problematic to push the message where it counts.

For us, this isn’t the first time we’ve seen a copyright collective gone bad. Throughout out 2006 going into 2007, Canadian copyright collective Access Copyright found themselves embroiled in scandal with the Captain Copyright campaign. At the time, Canadian advocates accused the collective of pushing one-sided educational materials on copyright. The materials even went so far as to get young school children to write op-eds in newspapers espousing the values of tightened copyright laws. The controversy was so great, the collective wound up shelving the effort in the end.

Micaheal Geist notes that this is far from the first time serious questions were raised about the actions of copyright collective:

The Australian case is far from an isolated incident. A quick search reveals plenty of examples of legal concerns involving copyright collectives with corruption fears in Kenya and competition law concerns in Italy over the past couple of months as well as recent fines against Spanish collecting societies. In fact, Jonathan Band and Brandon Butler published an eye-opening article several years ago chronicling an astonishing array of examples of corruption, mismanagement, lack of transparency, and negative effects for both creators and users from copyright collectives around the world.

Canada is home to an enormous number of copyright collectives and the allocation of revenues toward lobbying is also an issue here. For example, this year’s Access Copyright annual report re-names the longstanding expense on copyright tariffs as “Tariff, litigation and advocacy costs”, better reflecting expenditures on lobbying and advocacy activities in which the organization lines up against fair dealing and in favour of copyright term extension. Since the introduction of copyright reform in 2010, Access Copyright has reported spending nearly $7 million on litigation that has been largely unsuccessful, tariff applications, and government lobbying and advocacy (the specific amounts totalling $6.81 million are 2016: $641,000, 2015: $443,000, 2014: $826,000, 2013: $1,571,000, 2012: $1,221,000, 2011: $1,459,000, 2010: $730,000).

Given the expenditures, the federal lobbyist registry indicates that Access Copyright has emerged as one of the most active copyright lobby groups in Ottawa. Since the enactment of the 2012 copyright reforms, the registry lists 27 meetings including multiple meetings with the Prime Minister’s Office (PMO), Canadian Heritage, and Industry Canada/ISED. The number of meetings have increased over the past year, with five meetings listed in the lobbyist registry with just the PMO.

So, it would seem that this latest bombshell allegation only adds fuel to the fire when it comes to the distribution of royalties. Even if other copyright collectives are operating completely legitimately, there will be that added level of suspicion from the public thanks to this latest scandal. A fresh black eye for a kind of institution that is hoping that past problems would be behind them.

Drew Wilson on Twitter: @icecube85 and Google+.

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