7 December, 2018
Australian startups left reeling from the rushed legislation passed late yesterday evening in what amounts to an own goal by the Australian government
Australia, 7 December: StartupAUS today expressed its disappointment to see the passing of the Telecommunications and Other Legislation Amendment (Assistance and Access) Bill 2018 in the Senate yesterday evening. While StartupAUS acknowledges the need to combat dangerous criminal activity, this bill is both ineffective at doing so and creates a significant burden for the local technology sector.
In the latest edition of its flagship Crossroads report, StartupAUS details an increasingly hostile political attitude towards the technology sector. In an environment where legislation is difficult to pass on any issue, it is particularly frustrating to see bipartisan support for a bill that furthers Australia’s tech-phobic position in comparison to its international peers.
At a fundamental level, this bill puts Australian startups under a regulatory burden that is unique to them, and limits the level of security that Australian startups can develop. Startups will need to allow for the possibility that Australian law enforcement coerces them to ‘build new capability’ to decrypt communications for law enforcement. Such work will require development time and cost, and while some reimbursement possibilities are included in the bill, startups typically exist with very short cash runways and are put at existential risk when having to conduct significant activity that takes away from core business. In addition, the act of creating the capability to bypass privacy features itself carries with it an inherent risk of compromising users at the hands of cybercriminals and other rogue agents who take advantage of the added security bypasses.
In so doing, Australian startups will be left hamstrung when negotiating to export their digital services, given that in any competitive deal no global company will choose a weakened system provided by a company whose employees can be legally forced to comply with the Australian government, while also being unable to inform management that they are doing so.
International organisations providing similar digital tools will also be subject to these requirements and may simply choose not to operate in Australia – either cutting off Australian consumers from tech products or removing Australia as a destination to house a development team. In Crossroads 2018, released on 6 December, StartupAUS talks at length about the need to encourage international R&D on Australian shores – this legislation serves as a further barrier to that goal.
Finally, the bill circumvented with relative ease by those it is designed to foil. Criminals – in particular high-stakes criminals like the paedophiles or terrorists cited by the proponents of the bill – will be able to use software developed overseas, open source chat applications or operating systems, or even develop their own encrypted chat applications. At the same time, regular law-abiding Australians using software which is subject to compliance will have their security weakened, increasing the risk of cybercriminals, hackers and rogue agents getting access to their data and communications.