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10-October-2018

The internet – not an ungoverned space

The Sydney Institute

6.00 pm, 8 October 2018



When I was last here in 2016, I spoke about the communications sector being in a state of transition and how the NBN was changing the landscape, particularly for the online environment.


Tonight, I’d like to look forward and talk about the future of the internet and the role of government in that space.


The internet has fundamentally reshaped our economy and our society.


I can still remember the first time I heard about ‘the web’ from a computer scientist in about 1993. I thought to myself “This thing will never catch on…”  Twenty-five years later, I’m the Minister for it!


The internet has unleashed innovation, underpinned economic growth, and connected individuals and communities in ways we couldn’t imagine a few decades ago.


My computer scientist friend in 1993 described the web as ‘chaos’ and ‘freedom’. And for the first decade or two of the internet, that’s pretty much how regulators, governments and platforms viewed it.


But there has been a fundamental change in thinking over the last five to eight years on the part of the community and government.


The internet is no longer seen as an ungoverned space or as a libertarian ‘free-for-all’.


So it’s important to recognise what the internet is not. It’s not the ‘wild west’, where the rule of law and standards of decency shouldn’t apply. And it’s not a place, where anything goes.


It’s a shared space, and all Australians should be able to participate online and reap the benefits of a globalised world without experiencing offensive or harmful content.


There’s a clear role for the Government and industry to work together to ensure the interests of our community are protected, supported and promoted in the online environment, just as they are elsewhere.


Laws and norms should apply in the virtual world just as they do in the physical world. This is increasingly being seen in tax law, copyright law, competition law, criminal law, civil law and privacy law.


This doesn’t mean ‘regulate first’. The Government values the individual and their exercise of free choice. This is the starting position. Our focus is on ‘responsibility’:


·         Individuals need to be responsible, and accountable, for their behaviour online; as both producers of content and consumers.


·         Businesses who rely on the attention of their users and user-generated content need to prevent their services and platforms from being misused, and

·         Government has a responsibility to ensure individuals and businesses engage in appropriate online behaviour, and to act decisively when this doesn’t occur.


Already, we have taken significant steps to reform our media and digital sectors to make them viable and fit-for-purpose in the 21st century. We have modernised our broadcasting regulatory arrangements, addressed online safety issues, and are reforming Australia’s copyright laws.


But beyond this we will be assessing the need for further reform, particularly given the far reaching impact of digital platforms – such as Google, Facebook and others.


Before I outline some of the challenges, it’s important to set the broader scene.


The internet has revolutionised our world, creating new businesses, products and ways to communicate.


The benefits of search engines, social media and other online content aggregators have been significant:


·         Citizens have greater choice, easier access to services, and can create and consume content like never before.

·         Content creators have lower barriers to entry, cheaper content production and distribution costs, and the ability to reach niche audiences in increasingly sophisticated ways.


Some in our community look back to an earlier, simpler time; a period before the internet when the pace of life was much slower. While this has its attractions – the 5 am WhatsApp messages are not always welcome – I don’t subscribe to this theory.


The internet has unquestionably enhanced our well-being and standard of living.


While remaining optimistic about the future of the internet, one of its founders, Sir Tim Berners‑Lee, has recently voiced his concerns about the evolution of the internet “into an engine of inequity and divisions; swayed by powerful forces who use it for their own agendas”.


But we need to recognise and deal with the challenges it presents.


The internet creates new ways of defaming others that were not possible in the analogue world. It means bullying can transcend the school yard. It can expose the community to scams and fake news.


As the internet became mainstream in the late 1990s, most jurisdictions – including Australia – adopted a largely ‘hands-off’ approach; not wanting to burden an emerging and largely undefined industry.


Back then, the internet played a secondary role to traditional broadcasting and print media. Those traditional mediums were the channels that warranted government intervention – where the risks of concentrated ownership and lack of diversity were greatest, and where the community needed a strong voice.


But the goal posts have shifted. The internet has become a vehicle for change – a platform for new business models to emerge, disrupt and compete with those traditional media markets.


The main driver for this change has been the digital platforms: search engines (dominated by Google); social media outlets (dominated by Facebook); and other content aggregators (such as Apple News).


The ability for people to access and share a greater range of content via these platforms has fundamentally changed the relationship between citizens and government, between media companies and audiences, and between communities and groups in society.


·         Platform use in Australia is prolific – in 2017, Google accounted for 90% of search traffic originating from domestic desktop users, and over 98% of domestic mobile search traffic. And in April this year, there were over 13.5 million daily active users of Facebook.

·         Platforms are also now a dominant source of news – a recent survey by Reuters found that across 36 countries (including Australia), two thirds of online news consumption is channelled through algorithm-driven platforms like search engines, news aggregators and social media websites. This rises to almost three quarters for those aged under 35. And over half of the respondents used a Facebook product to access news, including WhatsApp, Messenger and Instagram.


Platforms have the potential to enhance our democratic processes and levels of civic engagement. However, there are real concerns emerging about the impact of digital platforms – particularly social media – on civic society.


The Australian Government has been at the forefront of making the internet a safer, more secure and more positive environment for the community.


In 2013, we established the world’s first Children’s eSafety Commissioner – a dedicated statutory position with a clear mandate to improve community awareness of online safety risks for children and to be a cop on the beat against online bullying.


In 2016, we expanded the remit of the Commissioner to cover online safety for all Australians. This shift recognised that online safety issues were whole-of-community. This has extended the Commissioner’s reach to targeted programs and activities for older Australians, women and vulnerable groups.


We created the eSafety Commissioner because we recognised the most vulnerable in the community were having harmful online experiences, and intervention was needed.


Several other countries are closely watching the Australian model and are hoping to match our success. I read recently that Ireland is considering creating a digital safety commissioner and modelling it on our approach.


We have also taken strong action on illegal and offensive content online.


We have strengthened the criminal offences around this type of content, particularly child sexual abuse material.


Recently, the Home Affairs portfolio established the Australian Centre to Counter Child Exploitation. This dedicated agency brings together law enforcement and national security agencies, regulators, industry and NGOs.


And in my portfolio, the eSafety Commissioner completed 8,000 investigations into child abuse material online last financial year, and identified more than 35,000 images and videos for removal.


And in August, the Parliament passed the Government’s legislation to create new civil and new criminal offences for the non‑consensual sharing of intimate images and gave the eSafety Commissioner new powers to order removal of this material.


Civil penalties of up to $105,000 for individuals and up to $525,000 for corporations can be applied for non-compliance.


The legislation also introduced two new aggravated offences for the Commonwealth offence of using a carriage service to menace, harass, or cause offence, which had a maximum penalty of three years’ imprisonment.


The new aggregated offences increase the maximum penalty to five years’ imprisonment where intimate images are involved and seven years’ imprisonment for repeat offenders of the civil penalty regime. This is another policy area where we are leading the world.


We’ve also empowered the eSafety Commissioner to order the removal from social media platforms of cyberbullying material directed at children.


The eSafety Commissioner can issue ‘take-down’, ‘service-cessation’ and ‘link-deletion’ notices to remove prohibited content or block access to prohibited services.


Non-compliance with end-user notices and social media notices can attract fines of up to $17,000 a day.

 

To date the eSafety Commissioner has resolved almost 1,000 complaints about cyberbullying material targeting children - and has had a 100% success rate in removing harmful cyberbullying material with the cooperation of social media services.


We’ve also reformed online gambling and gambling advertising. Australians love a punt, and this is made easier through the mobile devices we carry.


But we recognise the harm that can arise from online gambling and we are ensuring online gambling has strong consumer protections.


Last year we strengthened the regulatory framework to combat illegal offshore gambling.


Online gambling is big business, generating significant economic activity and employment. As a legitimate recreational activity for adults, it’s important that there are appropriately licensed and regulated options available for people to use.


But without proper controls, a series of risks emerge. For instance, proper identity verification is necessary to ensure minors are not opening and using betting accounts.


Information sharing between wagering operators and sporting bodies is essential, to ensure players and officials are not betting and to detect any unusual betting patterns that may flag integrity issues.


Such safeguards are not available where offshore operators are involved. And worse, many overseas wagering operators are – to borrow a phrase – bad hombres.


With links to organised crime syndicates – and worse – they are the last place we should enable Australian gambling dollars to reach.

So the Government passed new laws to make it clear that offering wagering services to Australians, without having first obtained a licence from an Australian state or territory, comes with heavy criminal and civil penalties.


And we have a number of other measures to crack down on illegal offshore wagering operators targeting Australians, including placing individuals involved with these outfits on travel alert lists and closer cooperation with partner regulators and agencies in other jurisdictions.


And we’ve listened to community concerns by restricting gambling advertising on online platforms during live sporting events.


These restrictions mirror those we recently introduced for broadcasters, and deliver consistency across broadcasting and online platforms.


But law and regulation can only do so much.


Industry can and should play a role. Digital platforms like Google, Twitter, Apple and Facebook are omnipresent in our lives.


·         They are the gateways to the internet – modern ‘shopping malls’ mediating and guiding consumer choices.

·         They are the ‘town squares’ in which increasingly we stay informed.


Their businesses have reshaped the economics of media, and fundamentally reshaped the production, distribution and consumption of content.


These large technology companies are not ‘passive platforms’; they reward and get rewarded for content that engages users.


In turn, they profit from selling that attention to advertisers. And it is clear that they regularly alter their content mix, through algorithms and human intervention.


As larger digital platforms define and shape our engagement with government, businesses and each other, they should be much more accountable for the content on their platforms.

 

And there are positive trends. Digital platforms and online content providers are increasingly realising they have a duty of care in the communities and markets that are brought together by their services.


I see this as coming to terms with the reality of their social licence – in much the same way that traditional media services recognised and accepted their social licence to the community in the 19th and 20th centuries.


These providers are taking steps to make their platforms and services safer, to reduce the capacity for manipulation and exploitation, to enhance data privacy and to support quality and accurate news.


This is welcome. As a Government, we expect industry to take the first step in responding to community standards for appropriate behaviours online.


But it remains to be seen whether their actions alone will be enough.


The internet should be free from unnecessary government intervention. But where platforms fail to act to reduce harm, we won’t hesitate to do so.


The community is watching, and we will act if the response of industry falls short of the mark. 


Online issues manifest in three unique ways.


Firstly, there is a question of scale. Digital and online media is operating on a scale that dwarfs the analogue environment. In 2017, YouTube reached a new record: every minute, 400 hours of content was uploaded. And if you consider the breadth of other platforms that allow users to create content such as Facebook, Twitter, Tumblr and Instagram, the sheer scale of this difference becomes apparent.


Secondly, the large platforms have upended the relationship between content producer and consumer. This isn’t, of itself, a cause for concern. Business models can and should change. This is part and parcel of the creative disruption at the heart of modern economies. But it does change the environment in which government is trying to make the internet a safer place that meets community expectations.


Thirdly, the diversity of content on digital platforms is almost infinite, and the divide between professional and user-generated content is eroding. Anyone with a camera or computer and an internet connection can create, upload and share content. And this content can, and often does, attract more attention than some mainstream outlets.


These attributes of the internet and the online world require specific policy responses regarding data, disinformation and digital marketplaces.


The first policy dimension is that in the online world, data is the ultimate commodity. Digital platforms are based on consumer data, and the ability to monetise that data by providing advertising opportunities to specific and targeted audiences.


While search engines and social media platforms provide services that deliver enormous benefit for consumers at no cost, the real price of access is consumer data – their browsing history, their purchase history and their location.


Around the world, communities are, quite rightly, becoming more aware of their data and privacy online. Two issues are emerging: whether consumers genuinely understand what they are agreeing to in signing up to use services; and data security.


Most of us have first-hand experience with online terms and conditions. Or more accurately, we’ve seen them and clicked ‘agree’. It’s fair to say that the terms of service and privacy policies for many online services are confusing and complicated. They don’t always set out clearly and simply what information the companies hold or how they will use it.


And we have seen some alarming instances of data breaches.


Our regulators are taking action. The Office of the Australian Information Commissioner is working closely with its international counterparts to investigate recent instances.


And under the data breach notification scheme, entities subject to the Privacy Act 1998 must notify individuals if their personal data has been involved in a serious breach, so that affected individuals can act quickly to minimise damage.


Between 22 February this year, when the scheme commenced, and 30 June this year, 305 breach notifications were made to the Office of the Australian Information Commissioner.


The second policy dimension is disinformation. This is nothing new and has been around as long as we’ve had a functioning media. What is new is the ways it is spread and how its impact is being amplified online.


Over the last few years we have seen an increase in intentionally misleading and inaccurate news. Often, this is relatively harmless ‘clickbait’, designed to draw users to specific sites, but it can also have the more sinister motive.


The size and reach of the major digital platforms intensifies this potential at an unprecedented scale and speed, meaning they can be used by state and private actors to intentionally cause public harm.


These platforms play a significant part in the propagation and consumption of fake news:


·         A 2016 study in the US found that 42% of traffic to fake news sites was through social media, and 22% via search engines. And some research suggests there is a strong correlation between Facebook use and reading false news articles, particularly for those users spending significant amounts of time on the platform.

·         While the overall consumption of fake news is around one tenth of genuine news sites, it is discussed and engaged with as much as real news. Indeed, some studies have shown that fake news reaches further, faster than actual news, reflecting our bias towards novel and popular content.


The major platforms know they have a role to play in addressing fake news. They are using automation to identify fake sources and close fake accounts – removing the capacity to monetise this type of content. They are also beginning to educate consumers and are working with independent third-parties to fact-check content that has been flagged as potentially misleading or false.


At the heart of these concerns is a systemic vulnerability of social media platforms to this type of manipulation.


·         Fake news producers can artificially boost traffic to their own content by means of bots, troll factories, fake websites and fake social media accounts.

·         Algorithms are geared to pick up content that is trending and push it up in search rankings and news feeds. Controversial information is also often prioritised to boost user engagement. 


The third and final policy dimension I want to touch on tonight goes to the economy-wide impacts of the digital marketplace.


Creative and cultural content is increasingly digitised and made available in the online space. This is a positive thing – it makes content more widely available, particularly for regional and rural communities.


Creators can also find audiences and build their profiles directly with the public in ways that have not been possible in the past.


The online environment also provides enormous opportunities for news publishers, broadcasters, film studios and other content producers to reach new audiences and expand their businesses.


But there are challenges.


Online and digital technologies have ‘unbundled’ media content production and consumption.


In this sense, media content has been ‘atomised’, reduced to individual articles or episodes. At the same time, the mass market for advertising has been pulled apart, with revenue moving to specific providers with the ability to precisely target users.


And consumers have been slow to accept paying for content online. Research from the Harvard Business Review indicates consumers do not value digital services as highly as physical goods because they don’t have the same feeling of ownership.


This makes intuitive sense. There is something satisfying about holding a bound paper book in your hands, or putting a CD – or, dare I say it, a vinyl record – on the stereo.


But these trends are making it challenging for our content creators to generate a return on investment.


Digital platforms are not wholly responsible for these impacts. They had little to do with the shift of classified advertising revenue from print publications to online providers, such as realestate.com and seek.com.


Nonetheless, they are playing a significant part in the process and are having a material impact on Australian content and creative practice.


Our focus is ensuring our creative industries – our film producers, broadcasters and publishers – can compete on a level playing field.


A major focus in this space has been combating piracy. The Australian film and television industry deserves major credit for tackling two of the biggest drivers of piracy – attitudes and availability.


I pay tribute to industry leaders like Village Roadshow’s Graham Burke, who have campaigned long and hard to change community attitudes about copyright piracy.


Let’s be clear – piracy is theft. Downloading an illegal copy of a movie or a TV show is no different to walking into JB HiFi and swiping a DVD off the shelves. In both cases, those who have invested their capital and time into producing a creative work are left unremunerated for their work.


The industry has also taken steps to ensure that content is made available to Australians in a timely manner and at reasonable prices. This has reduced the incentive for people to engage in piracy when you can, for example, watch the latest episode of Game of Thrones at the same time as the rest of the world and for a modest subscription fee.


But Government has a role to play too.


Online piracy will never be eliminated, but we can make life harder for the pirates. And we owe it to those who have had a go at a creative enterprise to back them with assistance to secure their property rights.


One initiative introduced by this Government has been the website blocking scheme in the Copyright Act. Where a website’s primary purpose is copyright infringement – a site like The Pirate Bay for example – rights holders can bring action in the Federal Court to seek orders that Internet Service Providers block access to it.


Such a scheme understandably made some people initially uncomfortable. We certainly don’t want to become a nation in which the Government blocks access to web content it doesn’t like.


But where a site exists purely to facilitate piracy, and with judicial oversight playing a crucial role, the website blocking scheme has been very successful in further reducing copyright infringement.


And if there are further enhancements to this scheme, we are open to them.


If we are to continue to have successful and vibrant creative industries in Australia, we must support that investment by doing what we can to prevent theft of these works.


This is essential if we want Australian voices to be heard and Australian stories to be told – not only in Australia, but also abroad.

 

So where to from here?


In December, the ACCC will release the draft report of its inquiry into Digital Platforms. This was a reference given to the ACCC by Government last year as part of media reform. The report will consider the impact of digital platforms on competition, advertising, news and journalistic content, and the implications for consumers, including privacy.


From the 73 submissions published on the ACCC’s website, the following key issues were canvassed by submitters:

·         It has been asserted that digital platforms are monetising content created by media organisations without contributing to the cost of content creation.

·         Advertising revenue is shifting from traditional media to digital platforms, eroding the business model of traditional media organisations.


·         Digital platforms are collecting and using data at scale, allowing them to leverage such data and create a competitive advantage in the market.


·         They are using algorithms that risk creating “echo chambers” and “filter bubbles”.


·         The platforms can become “gatekeepers” and set the parameters of the market, particularly to the commercial disadvantage of media organisations.


·         There is a view that regulation should be updated to keep up to date with changes to the market, and to level the playing field for both digital platforms and traditional media organisations.


The ACCC’s work will provide us with a wider and deeper perspective.


And it will be an important input into this debate to ensure our policy and regulatory settings strike the right balance in a contemporary global media environment.


As a starting point, we will seek to regulate only where necessary.


But we will make further interventions where significant problems persist.


And we will be guided by the following principles:


The first – and something I touched on earlier – is responsibility. This operates at all levels.


·         Individuals need to be responsible, and accountable, for their behaviour online.

·         Businesses must ensure that their services are not open to manipulation and harmful behaviour, and the must act swiftly if they are. 


·         Government has a responsibility to inform and educate, and provide the right incentives, and penalties, where content and behaviour doesn’t meet standards of decency.


The second is respect – respectful engagement online, and respect for the individual in accord with community standards.


Respectful behaviour online does not occur in isolation from the real world. How we treat each other offline will inevitably influence how we treat each other online.


Alongside responsibility and respect, we believe in fostering a level-playing field.


There are few examples in history where the dominance of single firms has been positive for society.


Competition delivers enormous benefits to the Australian community and economy.


In the online environment, this translates into the ability of all companies and individuals to participate and deliver products and services online.


And lastly, we are focused on trust and security.


Australians should be able to control their online footprints and their personal data.


They should be able to trust their online news sources.


And when these things don’t happen, we will look at the full range of policy, regulatory and other options available to us.


We are now at a turning point.


There is global recognition that the internet cannot be ‘that other place’ where community standards and the rule of law does not apply.


The internet is too interwoven into the fabric of our lives. We must ensure Australia is positioned to maximise the social and economic benefits.


Thanks very much.





Authorised by Senator the Hon Mitch Fifield, Liberal Party of Australia, Parliament House, Canberra.