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The ombudsman has warned Australian SMEs of US copyright laws that can impact their access to customers when selling online.
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ASBFEO issues copyright law warning for small businesses
11 October 2024
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Small businesses in Australia need to be aware of US copyright laws when selling online as they can shut down access to customers without warning, according to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).
The ASBFEO has released a guide for small businesses to raise awareness and follow when selling online.
Ombudsman Bruce Billson said he was concerned this law was being weaponised by ‘unscrupulous’ competitors to unfairly knock out genuine Australian businesses.
“We have seen Australian-based small businesses have their livelihoods damaged by unfounded allegations being made under these laws and then have their products taken down without warning by major selling platforms,” he said.
“Australian businesses need to be aware of competitors who seek to manipulate the Digital Millennium Copyright Act for market advantage and understand their rights if this is used against them.”
According to ASBFEO, most Australian businesses selling online used US-based platforms such as Etsy, Shopify and Square.
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This meant the Digital Millennium Copyright Act (DMCA) could seriously affect a business, which underscored the importance of knowing how it worked and what rights businesses had.
The DMCA, part of the US copyright laws, protects intellectual property and applies to any material that goes online, including online shops, descriptions of services and objects, images and media.
Under the DMCA, if a person believed any online content infringed on their copyright, a “takedown notice” could be issued.
Under a takedown notice, the online service provider would usually remove the content without warning.
Billson said the law was designed to protect businesses from the theft of intellectual property but could sometimes be used maliciously to put genuine competitors out of business.
Australian businesses could challenge the takedown notice or issue a counter-notice, Billson noted.
“If you decide to issue a formal counter-notice it will put you under the jurisdiction of the US legal system and the party who made the original claim can take it to the court, which can be an extremely expensive battle to fight,” he said.
“This can be a terrible dilemma because we have seen Australian companies forced out of business or lose access to a lucrative market because they could not afford to defend their economic interests.”
“Not responding to a DMCA notice will be interpreted by the platform as a surrender to the claim of copyright violation and will see the removal of the allegedly offending product, service or content affirmed.”
In a case brought forward to the ASBFEO, a DMCA notice had been issued against an Australian homewares business every time they advertised.
Until it was resolved, Shopify continued to shut down the online store which caused the business to lose business, time and money.
Billson cautioned Australian businesses not to consider their own unfounded DMCA action against competitors, as misuse of legal protections could backfire and lead to action being taken against them.
“In all cases, Australian small and family businesses should get their own legal advice if they are hit with a DMCA notice,” Billson said.
“In addition, they can get support from ASBFEO.”
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