Productivity Commission Misfires on Content Ownership in the AI Economy

The Productivity Commission's (PC’s) interim report, "Harnessing data and digital technology," released on 5 August 2025, proposes amending the Copyright Act to Include a Fair Dealing Exception for Text and Data Mining (“TDM Exception”). The proposal has triggered a firestorm of criticism from rights holders, including musicians, visual artists, and publishers, who argue that the innovation benefits of better informed AI technology do not justify the transfer of property rights. The vociferous reaction makes sense because the AI companies’ conduct has already been questionable; while lobbying for relief from copyright, AI companies are knowingly using copyright material for training without regard for the legalities. This report examines whether a new 'fair dealing' exemption should be granted to technology companies to train AI models using copyrighted material in order to promote AI innovation. In our view, the Australian Government (and also the New Zealand Government) should be wary of making concessions to the global AI operators. Instead of proposing exemptions, the Productivity Commission should promote streamlined marketplaces where buyers and sellers of intellectual property can negotiate mutually beneficial deals - not one-sided exemptions that will primarily benefit foreign technology firms at the expense of local creative industries.