The Australian Government has introduced a Bill to Parliament on combatting seriously harmful misinformation and disinformaton on digital platforms, but stirring public debate on whether the proposed legislation could erode free speech.
The government said the Communications Legislation Amendment (Combatting Misinformation and Disinformation) Bill 2024 is focused on combatting the most seriously harmful content on digital platforms, and contains strengthened protections for freedom of speech.
The government explained their rationale for the Bill:
While digital platforms have brought significant benefits to Australians – allowing us to connect with family and friends around the world, they can also serve as a vehicle for the spread of misleading or false information that is seriously harmful to Australian’s health, safety, security and wellbeing.
According to the Australian Media Literacy Alliance, 80% of Australians say the spread of misinformation on social media needs to be addressed.
The Bill will:
- empower the Australian Communication and Media Authority (ACMA) to oversee digital platforms with new information gathering, record keeping, code registration and standard making powers;
- introduce new obligations on digital platforms to increase their transparency with Australian users about how they handle misinformation and disinformation on their services;
- will complement voluntary industry codes but allow ACMA to approve an enforceable industry code or make standards should industry self-regulation fail to address the threat posed by misinformation and disinformation.
The government has emphasised that nothing in the Bill enables ACMA themselves to take down individual pieces of content or user accounts,
Platforms are and will remain responsible for managing content on their services in line with their own terms of service.
However, the Bill and its previous version has attracted criticism and concerns from legal experts and human right organisations around its potential to undermine free speech. The Australian Human Rights Commission expressed these concerns in its submission to a previous draft of the Bill, which concerns still apply with regards to the latest draft,
The first issue is the overly broad and vague way key terms – such as misinformation, disinformation and harm – are defined. Laws targeting misinformation and disinformation require clear and precise definitions.
The second key problem is the low harm threshold established by the proposed law. Content that is “reasonably likely to cause or contribute to serious harm” risks being labelled as misinformation or disinformation.
The fourth concern relates to the powers to regulate digital content that are granted under the draft bill to digital platform providers and (indirectly) the ACMA…There are inherent dangers in allowing any one body…to determine what is and is not censored content. The risk here is that efforts to combat misinformation and disinformation could be used to legitimise attempts to restrict public debate and censor unpopular opinions.
As the Australian Human Rights Commission points out, it is challenging to strike the right balance between combating misinformation or disinformation and protecting freedom of expression. While the government’s proposal seeks to tackle the real and present threat posed by misinformation, the Bill’s effectiveness in tackling this objective while remaining consistent with core democratic values remains to be debated.
Written by Jake Huang and Steven Pettigrove
Endangered tuna? SEC cans ‘wild-caught’ NFT membership
Crypto and blockchain have promised many new innovations and business ideas, and amidst the claimed scams and cash-grabs of the ICO boom and roaring (then falling) NFT market, one project stood out as providing an innovative use-case for NFTs as a tradeable membership token, similar to how fans can presently procure season tickets or (if they are rich enough, debenture seats in stadiums, and potentially enable leasing out or transfers of those membership with lower costs than has occurred before.
We wrote it up at the time and said that:
The membership opportunities for NFT holders to interact as part of an exclusive club are only just starting and more experiments of this kind are sure to come.
The basic idea was that two different NFT tokens would entitle holders to different special access at the restaurant, including for private dining. The sale netted US$14.8M for the sellers and some NFTs were retained future sale, and with a plan for additional clubs, offerings and social experiences. Unfortunately, the US Securities and Exchanges Commission has, in the words of dissenting Commissioners Peirce and Uyeda:
with the many demands on its time and resources, inexplicably has decided to focus on membership in an exclusive dining club
There is no allegation of fraud, and the floor price of the NFTs is remarkably stable compared to the broader NFT market, but the SEC has irrespective sued FlyFish and entered into a somewhat peculiar settlement deal on a no admissions basis under which FlyFish must destroy any remaining NFTs it holds, not accept any royalties for secondary sales of the NFTs, delete links to crypto exchanges on their website and social media, and pay a US$750,000 penalty.
The press release concerning the claim by the SEC merely asserts the NFTs were an “unregistered offering of crypto asset securities”, which is interesting as the SEC has just had to apologise to a Court for using the phrase “crypto asset securities” which has no meaning under law. There is no guidance or explanation of how the NFTs are said to have comprised securities other than the SEC alleging (with good grounds it seems) that:
Flyfish told investors that they could potentially profit from FlyFish’s efforts
The dissenting Commissioners assert the NFTs sold “are utility tokens, not securities”, and that:
A well-known artist who sells a limited set of numbered prints may be selling to a couple who wants to display her art in their home, or to someone who wants to turn around and sell it for a profit and is making a bet on the artist’s future. The intent of a buyer cannot transform a non-security into a security.
In a rare case of regulators making the case for less regulation, the dissenting Commissioners point out that:
The securities laws are not needed here, and their application is harmful both in the present case and as future precedent. The Flyfish NFTs were simply a different way to sell memberships. Why shouldn’t a chef be able to sell memberships to eat at her kitchen table and to collect royalties on resales of those memberships? NFTs offer a promising way to allow creative people—such as chefs, musicians, or visual artists—to monetize their talent and a potentially efficient way for selling access to experiences and communities.
The dissent casts a wide net in their closing comments, hooking the need for expensive lawyers in the web3 space:
Creative people should be able to experiment with NFTs without having to consult a high-priced tea-leaf reader—ahem, lawyer. The Commission can change its menu to include a healthy serving of guidance to give non-securities NFT creators the freedom to experiment.
A further school of no-admission settlements are expected as the US election looms and the present SEC rushes more regulation by enforcement before a possible change in the policy approach in the US. Other jurisdictions will hopefully learn that industry consultation and workable regulation is the best path to provide consumer protection and encourage innovation.
