Australia's AI copyright plan could cost it a huge payout, experts warn

Australia is weighing a change to copyright law that would help AI companies train on music, books and journalism. Now experts and politicians warn it could backfire. They say it might break a rule in the constitution and expose the government to compensation claims from rights holders worldwide.

What is being warned about

The constitution lets the federal government make laws about acquiring property, but only "on just terms", which means fair payment. The same legal point drove the movie The Castle. Critics say copyright is a form of property. If the law gave AI firms permission to use it, that could count as the government taking it.

What the experts say

Anne Twomey, a leading constitutional expert at the University of Sydney, said there is "potentially" a concern, depending on how the law is drafted. She stressed the issue is complex and that no legislative proposal has been aired. The High Court has heard cases on video games, cigarette plain packaging and cassette tapes, with varying outcomes.

Nationals senator Ross Cadell went further. He said Australia "could be liable" for compensation to "every rights holder on Earth". The attorney general's department said it was "extremely alive" to the issue. Officials did not directly answer a question about foreign rights holders.

The opt-out idea

Some AI companies have said licensing deals under current law are too difficult. Anthropic suggested an opt-out model. Under it, a company could collect content unless the owner used digital protections to signal an objection. Annabelle Herd, head of the Australian Recording Industry Association, called any such plan "clearly an acquisition of property".

Why the world is watching

Chris Maund of Mushroom Records said current copyright law is working and that AI firms should use existing licensing. He noted Spotify is already making AI-related deals. He also warned that an AI company could train in Australia to sidestep rules elsewhere. Twomey said hosting such training could potentially give global rights holders grounds to sue here.

What happens next

A federal announcement on AI is expected soon. Copyright is one piece of a wider package that also covers datacentres, online safety, jobs and energy. Prime Minister Anthony Albanese has promised "the strongest possible protection" and called unpaid use of creative work "theft". A spokesperson for Attorney General Michelle Rowland said any change must deliver "meaningful control and fair compensation".