Fair Dealing or Free Dealing? ARIA and PPCA Push Back on AI Copyright Reform

08.14.25

On 5th August 2025, the Productivity Commission released an interim report ¹ on “Harnessing data and digital technology”, which included discussion around a proposal to create a new fair dealing exception in the Copyright Act for text and data mining. As the Australian Government’s independent research and advisory body for economic, social and environmental issues, the Productivy Commission’s aim is to help governments make better policies in the long-term interests of the Australian community. ²

According to the commission, Artificial Intelligence (AI) could bring between a 0.5% to 13% increase in productivity in the next decade, with a productivity increase of over at least 2.3% deemed to be likely. The Productivity Commission’s interim report seeks feedback on whether reforms are needed to better facilitate the use of copyrighted materials in the context of training AI models in Australia. ³

The Opposition

The Australian Recording Industry Association (ARIA) and the Phonographic Performance Company of Australia (PPCA) have taken issue with the report in a statement that rejects the Productivity Commission’s proposal to incorporate a new fair dealing exception for text and data mining in the Copyright Act. ⁴ ARIA is a national industry association proactively representing the interests of its members,⁵ and PPCA is a national, non-government, non-profit organisation that represents the interests of record companies and Australian recording artists. ⁶

Both of these organisations argue that the proposal would give overseas-based technology companies unrestricted access to Australian creative works, undermining their value and robbing creators and intellectual property producers of the right to fair remuneration for the use of their work. They described the proposal as “ill-considered and contrary to Australia’s best interests.”

Impact of Reforming Fair Dealing

What exactly is fair dealing?

In Australia, when an original artistic work is created, it is automatically protected by copyright. Copyright can protect works of art, video works, music, literature, and performances – among other things – and gives the creator of that work exclusive rights to create copies of it and exploit it for commercial purposes. However, under Australia’s Copyright Act 1968,⁷ the concept of fair dealing means that certain limited uses are allowed to be made of copyright material without needing the permission of the copyright owner.

This includes statutorily prescribed activities like research, study, and criticism. Australia’s fair dealing exception is generally considered to be much narrower in scope than the ‘fair use’ exception in the US, which is far more flexible and is generally assessed on a case-by-case basis. ⁸

Australia’s fair dealing exception was designed in 2006 as a legal safeguard to ensure that copyright law didn’t stifle creativity, education, or public discourse. It aims to allow limited access use of copyrighted material for research, study and education and to encourage free expression through supportive criticism. It also aims to balance creator rights a system of protection that isn’t absolute or oppressive. These exceptions act as “safety valves” in the copyright system, enabling socially beneficial uses over which copyright holders shouldn’t have a complete monopoly. Australia has considered adopting the more flexible U.S. style “fair use” system, but critics argue that it would introduce legal uncertainty and favour large corporations over individual creators and users. So far, Australia has retained its purpose-based fair dealing model. ⁹

Views of ARIA & PPCA

CEO of ARIA and PPCA, Annabelle Herd, has responded by stating that the Australia’s current copyright law aligns with global standards and provides a clear framework for licensing and negotiation that fairly reward creators and supports innovation in Australia. ¹⁰ Ms Herd believes that the introduction of a text and data mining (‘TDM’) exception under existing fair dealing provisions would give AI companies an unbridled license to exploit creative works for the commercial benefit of large corporations and has called for optimising existing licensing systems instead. ¹¹

The CEO further added that “Australia’s existing copyright law is the foundation of the creative industries and the digital economy. It currently aligns with global standards and effectively drives innovation and mutually beneficial negotiation without compromising Australian rights and investment.” ¹²

“Australian songs, stories, art, research and creative works are among our nation’s greatest treasures: they deserve respect, not exploitation. Instead of rushing to open the gates for AI companies to unrestricted and free access to the valuable intellectual property of artists and creators, the Productivity Commission should work to optimise existing licensing frameworks that can deliver promised AI productivity gains without gutting Australian copyright.” Ms. Herd said.

This also raises questions as to whether it is helpful – or indeed productive – for the Productivity Commission to frame discussions around copyright protection for Australian creators in the lens of productivity gains.

ARIA and PPCA – among other organizations including the Digital Rights Watch – are calling on the Commission to preserve the current copyright structure and support Australian creators by ensuring fair access and proper compensation in the evolving digital landscape.

What’s to see next is if the proposal is accepted by the Australian Government or if a serious statement by ARIA and PPCA will affect this decision.

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Photo by Ales Nesetril on Unsplash

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