‘Australian companies are already losing’: Tech industry takes aim at controversial encryption bill.
‘Australian companies are already losing’: Tech industry takes aim at controversial encryption bill.

‘It hurts us’: Billionaire slams new laws

AUSTRALIAN companies are disadvantaged and "are already losing revenue" thanks to the Government's rushed encryption busting legislation, critics say.

The local tech industry has banded together calling on changes to be made to the controversial bill which has left them angry and frustrated at the lack of genuine consultation from government.

Daniel Petre is considered an elder statesman of the country's burgeoning technology industry and is involved with 43 local companies as part of his work at Australian venture capital firm Airtree. He has been left fuming by the "ridiculous" and "silly" consequences of the bill, which he sees as a product of political parties wanting to look tough on national security.

"I think it's important that this is seen as an industry-wide commentary and concern," he told news.com.au. "This is not one group of companies trying to be self-serving. This is way bigger than that."

He uses the example of a foreign company looking to license Australian software and says they would likely choose an overseas provider if they feared being caught up in the overly broad legislation, which gives law enforcement power to compel companies to grant access to encrypted communications.

"Given that in every software category there are competitors, the easy option is to buy elsewhere," he said. "That's happening today, Australian companies are already losing revenue, losing global customers, because of this legislation."

Mr Petre is a former VP of Microsoft in Seattle during the tech giant's most dominant period and has 30 years' experience in the tech industry, so he knows more than most about how software companies tend to act.

With a federal election months away, he believes Australian internet companies will continue to be "unnecessarily" held hostage to political posturing on national security.

"The commercial reality of delaying an intelligent debate about this is that Australian companies will suffer … It's not like we're doing that well globally," he said.

"Once the election is over, hopefully sanity will prevail and there will be an intelligent conversation."

Daniel Petre, who gives a third of his income to charity, is one of Australia’s most successful venture capitalists.
Daniel Petre, who gives a third of his income to charity, is one of Australia’s most successful venture capitalists.

Mr Petre's venture capital firm has joined forces with the billionaire co-founders of Australian software giant Atlassian and other local tech firms including Canva, Freelancer.com, Safety Culture and WiseTech Global on an industry submission lodged today with a parliamentary inquiry currently scrutinising the bill.

The submission is led by StartupAUS, the country's peak national advocacy group for start-ups, and calls for a number of urgent changes to relieve the Government of "globally unprecedented power to involve itself in the operations of technology companies."

Law enforcement in other countries in the so-called Five Eyes intelligence sharing network including the US and the UK have sought similar powers to fight encyption, but Australia's bill is the most broadly defined.

Atlassian co-founder Scott Farquhar called on the Government to reduce the scope of the bill to limit the negative consequences impacting the local tech industry.

"At a time when we should be leaning into Australia's tech potential, we're anchoring it with legislation that hurts us," he said in a statement.

 

WHAT IS ALL THE FUSS ABOUT?

The so-called Telecommunications and Other Legislation Amendment (Assistance and Access) Act 2018, is more commonly referred to as the AA bill or encryption bill.

It has been widely criticised by Australia's tech community, global tech firms, academic experts and civil liberties campaigners for being vague and too far-reaching. The Law Council of Australia also raised concerns days before it passed parliament, citing the risk of unintended consequences of not properly scrutinising the bill.

It is designed to gives police and intelligence agencies the power to compel tech companies like Apple and Facebook and other communications companies to break open encrypted traffic to let authorities peak at online messages.

That includes requiring companies to build tools for police use or provide a way for authorities to intercept encrypted traffic, leading to concerns about "backdoors" which could be exploited by hackers.

The Government says the bill will keep Australians safe. A chorus of opponents say it will do the opposite by making internet users more vulnerable.

Much of the criticism has been around the broad nature of the bill and the lack of meaningful industry consultation before it was pushed through.

"The intent is to capture messaging providers - some ISIS cell is trying to blow up Martin Place and we capture their communications," Mr Petre explained. "We're all for that. But any company that connects to the internet is trapped by this."

"There's a breadth issue that is just ridiculous."

The Government says it will put law enforcement "back in the game" when hunting terror suspects, drug dealers, paedophiles and other dangerous criminals who rely on encrypted messaging.

Australia’s top tech billionaires Scott Farquhar and Mike Cannon-Brookes have been outspoken against the broad nature of the powers. Picture: Harold David
Australia’s top tech billionaires Scott Farquhar and Mike Cannon-Brookes have been outspoken against the broad nature of the powers. Picture: Harold David

Despite opposition to how the bill was crafted, the legislation was rushed through on the final sitting day of parliament on December 6. Labor initially declared it would seek a raft of changes to the bill before providing support however capitulated in the face of public attacks from the Coalition about being soft on national security. The Opposition says it still fight for amendments.

Last week the Government confirmed intelligence agencies have already issued notices under the controversial new legislation.

 

THE CHANGES INDUSTRY IS CALLING FOR

The industry is calling for four central adjustments to be made to the bill.

Under the legislation, the required "assistance" is vast. The Australian Government could demand web developers deliver spyware and software developers push malicious updates. Individual employees could be targeted with such demands (called technical assistance notices, or TANs) without telling their employer, or risk facing jail.

"That puts them in a terribly tenuous position," Mr Petre said. "That's not well thought through."

The StartupAUS submission would like to see the Government "remove the possibility for TCNs to be issued to individual employees".

It also wants to reduce the breadth of organisations that may be regarded as a Designated Communications Provider.

"By broadly defining a Designated Communications Provider as any provider of electronic services with one or more end users in Australia, this includes any technology provider that offers technology designed to connect to the internet, whether or not the service is designed to support communications," the submission says.

Thirdly, the industry is calling for an objective, merits-based review to improve the checks and balances on how the powers are used.

And finally, it wants to see a reduction in the broad basis for executing the powers of the Act and a stricter definition of a serious crime to only include those "that pose a genuine and serious threat to Australia and its citizens."

The initial bill proposes the powers to apply to crimes that are punishable by a maximum term of imprisonment of 3 years or more.

The final report from the Federal Parliamentary Joint Committee on Intelligence and Security regarding the AA bill is due on April 3.


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