Internet providers could soon be forced to give out the personal details of customers caught illegally downloading content.

EVERYDAY internet customers who download TV shows, movies and music for free could soon be hit with massive fines, legal threats and skyrocketing internet bills, a consumer group has warned.

Consumer advocate Choice has slammed a “truly scary” plan from Australia’s internet service providers (ISPs) that could open average customers up to being sued by Hollywood studios.

Australia’s biggest ISPs — including Telstra, Optus and iiNet — have joined forces to establish the Copyright Notice Scheme Industry Code, which aims to reduce online piracy.

At the request of the Federal Government, the companies have formulated a three-strikes notice scheme that aims to change the behaviour of customers and steer them towards lawful sources of content.

But Choice says it is a “heavy-handed scheme” that will “drive average Australians into the court system”.

“The scheme reads like the script of a Hollywood horror film,” Choice campaigns manager Erin Turner said. “It would see average teenagers, mums and dads facing uncapped fines and legal threats. It’s truly scary.”

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SO, HOW DOES THE SCHEME WORK?

Under the draft code released last week, customers suspected of illegally downloading content would be hit with a series of escalating infringement notices from ISPs. After the first breach, a customer would be emailed a standardised “Education” notice and if they continued to breach copyright laws they would be sent a “Warning” notice followed by a “Final” notice.

The ISPs plan to detect illegal downloading through customers’ internet protocol (IP) addresses, and then send warning letters to the account holder.

The email must be sent within seven days of the infringement and include the title of the work, and the date and time of when the downloading occurred.

The final notice, which does not have to carry the ISP’s branding, warns that the account holder could be taken to court and recommends they “seek independent legal advice”.

The “three strikes and you’re out” scheme can then kick off a “facilitated preliminary discovery process”, which obliges the ISP to serve up the customer’s identity to the rights holder.

If a customer receives three notices within 12 months, the owners of the content — such as Hollywood studios or record companies — can then apply to a court to access the customer’s name, address and contact details and launch legal action against them.

“Any rights holder whose copyright work has been the subject of an Education, Warning or Final Notice will be provided with assistance to take direct copyright infringement action against an account holder,” the code reads.

The code is still in draft form, but ISPs hope to implement it by September 1.

WHAT’S THE AIM OF THE SCHEME?

The spokesman for the industry body behind the scheme, John Stanton of the Communications Alliance, said the scheme was focused on public education, rather than punishing those who did the wrong thing.

“Ultimately we’re trying to strike a balance. We’re trying to ensure privacy and that personal details are protected, that any allegation (of copyright infringement) will be independently reviewed, that customers don’t face sanctions,” Mr Stanton told news.com.au.

WHAT ARE THE DANGERS?

But Choice argues that the “heavy-handed scheme” fails to protect Aussie consumers.

“What we’re worried about is the final notice step that would funnel people into legal action,” Ms Turner told news.com.au.

“There’s no limit on how much people can be fined and it opens up a whole bunch of risks.

“The scheme also forces internet service provided to act as an anti-piracy police force on behalf of Hollywood rights holders, handing over personal contact details on the basis of unproven allegations.”

Ms Turner said similar schemes overseas had led to rights holders sending “speculative invoices” to account holders.

“We’ve heard reports of customers being sent letters that say, ‘Pay this amount of money or we will take legal action’,” Ms Turner said.

Customers usually just paid the amount to “make the very scary process go away”, she said.

Choice also says that the “discovery process” clause in the code is worrying because it requires ISPs to participate and comply with any court actions, rather than protect their customers.

However, Mr Stanton said the discovery process was a legal right available to rights holders already, as evidenced by the Dallas Buyers Club case.

Ms Turner said that the code did not address the cause of illegal downloading in Australia.

“We’ve looked into the reasons people pirate, and it’s due to cost and availability,” she said.

“There’s still massive delays when content is available in Australia. It’s a market failure. Consumers know this.”

Ms Turner said infringing copyright was wrong, but Choice research showed customers mostly turned to illegal means when they couldn’t find the content they wanted.

“It doesn’t excuse it, but it does explain it,” she said.

Mr Stanton agreed that “more needs to be done” to address the problems of access and affordability of content in Australia.

But he disputed Choice’s claim that average customers should be worried about the code.

“I can understand that this may not be a popular move with some customers but we’ve genuinely tried to strike a reasonable balance,” Mr Stanton said.

“I don’t expect there to be universal acclaim, but it’s a scheme that’s fair, that’s not punitive and that balances competing interests.”

WHO WILL PAY?

Choice is concerned that customers will have to bear the cost for the scheme, which could drive up internet bills.

“If ISPs end up paying the lion’s share of administration costs, these are likely to be passed on to their consumers,” Ms Turner said.

“We don’t think consumers should be footing the bill for an ineffective industry initiative.”

The Communications Alliance argues that the rights holders should reimburse the ISPs costs, given that they will act on their behalf.

“Law-abiding internet users should not have to pay for Hollywood enforcing its copyright,” Mr Stanton said.

The Copyright Notice Scheme Industry Code is open to public comment here until March 23.