The Australian Communications Consumer Action Network is concerned the Dallas Buyers Club court win could spur legal shake downs of Australians through speculative invoicing.
Speculative invoicing is the practice where a rights holder sends a letter of demand for payment of damages to an account holder who has allegedly engaged in illegal downloading.
The concerns follow the federal court case between iiNet and the owners of the rights of the Dallas Buyers Club.
The Federal Court has ordered iiNet and other ISPs to provide details of customers who have downloaded the film.
This means the copyright owners can now send letters to the people who downloaded the film without permission asking them for payment.
ACCAN is concerned that the Copyright Code will streamline ‘speculative invoicing’.
ACCAN has been working with industry and rights holders to develop the industry Copyright Code which today has been submitted to the ACMA.
The Code includes a Notice Scheme that will see consumers sent infringement notices if they are alleged to have downloaded pirated material.
In its submission to Communications Alliance, ACCAN outlined significant concerns in the Code’s consumer safeguards.Read more: 'Do Not Call' spam phone call legislation passed
ACCAN chief executive, Teresa Corbin, said speculative invoicing had occurred in the US, Canada and UK where consumers had been sent intimidating letters demanding compensation for claims of illegal file sharing.
“The Dallas Buyers Club Federal Court decision is worrying because in the future Australian consumers may be sent threatening letters shaking them down for money or face the threat of legal action,” she said.
ACCAN has proposed that rights holders who engage in speculative invoicing be barred from using the industry Notice Scheme.
Overseas there have been cases where consumers have been intimidated into paying $9,000(AUD) in out of court settlements to appease copyright holders.
ACCAN urges any consumers who receive a speculative invoice to seek independent legal advice before taking any action.
It also has further concerns regarding the cost and the questionable benefits of the scheme.
Corbin said, under the Code, internet service providers (ISPs) would be forced to keep evidence of online copyright infringement and send infringement notices to customers.
“The cost of running the scheme will be passed on to consumers through higher internet bills," she said.Read more: ACCAN applauds Telstra for data alerts move
"We are calling on the Australian Communications and Media Authority to subject the scheme to a cost benefit analysis by the government Office of Best Practice Regulation and ensure it meets appropriate community safeguards.”
ACCAN has further concerns regarding the security of consumer information that will be collected under the Code.
"This information will be a treasure trove to hackers who may illegally access the information and compromise consumer privacy," according to an ACCAN statement.
Corbin said there were no provisions in the Code forcing ISPs to delete information once it is no longer useful.
"This is a real concern given the Code requires ISPs to store information about download history and potentially illegal activities," she said.
“Ultimately market solutions that provide affordable, available content to Australian consumers will have the biggest impact on piracy."