Australia Rejects AI Training Exceptions: Shift to Music Licensing Frameworks

Image Credit: Jacky Lee

Australia’s Productivity Commission has recommended a wait and monitor approach on AI training and copyright, rather than proposing a new text and data mining exception now. The recommendation appears in the Commission’s final inquiry report Harnessing data and digital technology, released on 19 December 2025 (and submitted to the Government on 10 December 2025).

What Happened?

In its final report, the Productivity Commission recommends the Australian Government monitor the development of AI and its interaction with copyright holders for the next three years, focusing on:

• licensing markets for open web materials

• the effect of AI on creative incomes generated by copyright royalties

• how overseas courts set limits to AI related copyright exceptions, especially fair use

If those issues do not resolve after three years, the report says the Government could establish an independent review of copyright settings and AI.

This is a shift from the Commission’s earlier posture in 2025. The interim report (released 5 August 2025) explicitly raised the idea of amending the Copyright Act to include a fair dealing exception covering text and data mining, and asked for feedback on whether reforms were needed.

Too Soon to Add a Text and Data Mining Exception

The final report sets out why it does not recommend moving now. It argues that introducing a text and data mining exception too early could:

• distort or prevent licensing markets from developing

• weaken incentives to produce Australian creative content

• become hard to unwind later, because models trained under an exception keep what they learned

It also warns that trying to limit an exception to open web material may not work cleanly in practice, and notes the European Union’s opt out style approach has not, in its view, been successful to date.

The Government’s Position

This sits alongside the Australian Government’s earlier statement that it is not considering a text and data mining exception. In a 26 October 2025 media release, Attorney General portfolio Minister Michelle Rowland said consultations on AI and copyright would proceed, but would not include a Text and Data Mining Exception, and flagged work through the Copyright and AI Reference Group on options such as paid collective licensing or voluntary licensing.

The Productivity Commission’s final report directly references that position in its discussion of why it is too soon to legislate an exception.

What This Means For The Creative Economy

For the music industry, the immediate implication is that the policy conversation is being pushed toward licensing frameworks, rather than a blanket exception that would let AI developers train on copyrighted works without permission.

The Commission notes that voluntary licensing for AI training is emerging for some types of content, including song and other creative content, and explains why large AI developers often seek licences when paywalls block access or when they want permission for verbatim reproduction of training data in outputs.

It also sets out a practical breakdown of content categories, explicitly describing music as part of the group where licensing is generally more straightforward because rights are often already managed and licensed through established channels, including collective licensing.

Real World Examples

The final report includes a table of examples of AI related content access agreements. For music, it references an ElevenLabs agreement with Kobalt and Merlin, describing it as training on licensed content and noting safeguards such as restricting certain prompt terms like artists’ names and song titles.

For industry readers, the significance is less about any single deal and more about what the Commission is signalling: licensing is already happening in pockets, and policymakers may prefer to see whether that market matures before considering legislative carve outs.

How Music Sector Bodies Responded

Music industry groups quickly framed the final report as supportive of licensing. ARIA publicly welcomed the Commission’s findings, arguing that creators should retain control over how their work is used and that voluntary licensing can provide certainty while supporting ongoing creation of Australian music.

APRA AMCOS also responded in similar terms, while warning that some tech and business interests remain reluctant to start licensing negotiations and may continue advocating alternative legal theories to reach a similar outcome to an exception.

A Small but Notable AI Detail inside The Report Itself

The Productivity Commission also discloses that the report was prepared using AI tools for general research and note taking, and that staff reviewed AI generated outputs for accuracy and quality.

License This Article

Source: PC, AG Portfolio, Harnessing Data and Digital Technology, ARIA, APRA AMCOS

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