Monday, August 11, 2008

New push for censorship

"Privacy" is a great smokescreen for protecting crooks. Publicity is almost the only weapon against many abuses by government and others

Australia's top news organisations are readying for a showdown if the Australian Law Reform Commission recommends tough new privacy laws today, as expected. The commission's report could have significant ramifications for news reporting, especially on the lives of well-known people. Justin Quill, a media and litigation lawyer and director of law firm Kelly Hazell, said a privacy law would most affect magazines that specialised in reporting celebrity news, followed by shows such as A Current Affair and Today Tonight and then other news services.

Gilbert + Tobin partner Peter Leonard expected the immediate effect of a privacy law would be "more cautious reporting around the personal life of celebrities". For example, he said much of the reporting of former AFL footballer Wayne Carey might be disallowed if a privacy law existed. "It could have a significant chilling effect on the reporting of the private lives of celebrities," Mr Leonard said.

In its newsletter last week, Gilbert + Tobin said the ALRC's report was expected to recommend "the most significant changes to the Privacy Act in the 20 years of its existence". "There is a strong expectation that Special Minister of State Senator John Faulkner will commit the Government to act on the ALRC's recommendations, and that he will introduce relevant legislative amendments in the foreseeable future," it said.

The Right to Know Coalition, which represents Australia's top media groups, including News Limited, publisher of The Australian, on freedom of speech issues -- is against a privacy law. "Protection of privacy needs to be balanced against the public interest in allowing the free flow of information and upholding freedom of speech," a spokesperson said. "It has not been demonstrated that existing privacy protections fail to achieve this balance."

The Right to Know Coalition argued a statutory right to privacy would restrain the media's ability to keep the public informed. "The ALRC has failed to demonstrate a breach of privacy by the media is not already dealt with by existing laws, such as defamation and surveillance laws or self-regulation by the media," it said. "The law would be irrelevant to ordinary citizens in whom the media has no interest. It would be open to abuse by irresponsible claimants who would clog our already over-burdened courts. "Such a law would simply allow rich people to employ lawyers in a bid to avoid scrutiny of their wrongdoing."

Fairfax Media general counsel Gail Hambly said the evidence in Europe, where a privacy law existed, was that it was only used by high-profile people. "It allows the rich, powerful and celebrities to manipulate their images in the way they want them manipulated, rather than having some transparency," she said. Ms Hambly said she was recently at a conference on the issue in Britain where an attendee made a sound suggestion. "They said privacy laws would be OK on the whole if anyone with a PR agent was exempt from taking an action," she said.

Mr Leonard believed there could be some advantage to introducing a privacy law. "I think it may be a sensible development for the media as it would mean the defamation laws don't get stretched to be used as a substitute for proper protection against invasion of privacy." He said if there was a new privacy law it needed to feature restraints such as acknowledging legitimate public interest.


Balancing competing rights requires trade-offs

COMMENT from law Professor James Allan

How would you balance the rather vague, amorphous notions of a "right to respect for one's private life" and a "right to freedom of expression"? Both these concepts are nebulous enough, and they sound emotively attractive enough, that they finesse disagreement. Put differently, everyone would say that he or she is in favour of both rights. "Yep, I like the idea of a right to privacy and yep, I like the idea of a right to freedom of expression."

Of course, any ideas articulated in those sort of indeterminate terms will only finesse disagreement for as long as they remain moral abstractions. As soon as you ask more specific questions -- where should we draw the line when it comes to campaign finance rules or hate speech provisions -- all the feel-good agreement evaporates. You have smart, reasonable, nice people disagreeing. You have lots and lots of moral "dissensus".

The same goes for any right that is phrased as an indeterminate moral abstraction, which is to say all the rights in any bill of rights. But there's a different problem that sometimes gets overlooked. You see, any list of moral abstractions-cum-rights will give rise to real life situations where those rights conflict with each other. One right can be relied on to point one way and a different right to point the other way. Take the following scenario. (And who can resist making use of it?) Start with the president of the body that oversees Formula One car racing, one Max Mosley.

Make him someone who enjoys sado-masochistic orgies with hookers, lots of hookers, five to be precise. Let there be some question of whether the bondage clothes worn by the women looked like Nazi uniforms. Throw in one of the big British tabloids. And just to round it off, let that president be the son of Sir Oswald Mosley, the politician and baronet who founded the British Union of Fascists in the 1930s. Now what if one of the five hookers had been paid by the tabloid secretly to video this bondage session? And the tabloid then published it, along with a very racy headline I'll leave you to imagine.

Of course the above scenario has recently played out in fact in London. And the man at the centre of the bondage video (at least one supposes he was at the centre, though with six people involved, who knows?) decided to sue the tabloid. The regular law of defamation wouldn't work because Max Mosley admitted that the main parts of the story about his long-time involvement in these sort of S&M sex sessions were true. And truth is a defence to defamation proceedings. So instead he decides to sue by relying on the new statutory bill of rights, which incorporates the European Convention on Human Rights into English law.

The case boils down at its simplest to how to balance two of the articles. Article 8 grandly guarantees the "right to respect for one's private life". Article 10 protects the "right to freedom of expression". Neither right is meant to be absolute. Reasonable limits apply, though of course talk of "reasonable limits" is itself just another vague, amorphous notion that masks disagreement. What counts as a reasonable limit and when is itself a massively contentious issue about which people disagree.

Anyway, I'm betting that readers will split pretty evenly on this. A lot of you will think this is just bedroom conduct (OK, a bedroom decorated as a dungeon conduct) that really isn't anyone's business save Mosley's and the five hookers. It's not as though the tabloids aren't a pretty distasteful lot themselves. And we know they're out to sell, sell, sell those papers. And talk of their acting in the public interest can reek of hypocrisy, let's be honest.

On the other hand, I'm betting there are also lots of free speech types out there who think this is in the public interest. The stuff caught on film was true. People are clearly interested because they buy millions of papers to read it. And if we start restricting the reporting of this sort of case, what about when Jeffrey Archer does roughly (sorry, no pun intended) the same sort of thing and lies? Or what about when newspapers want to reveal the goings-on of former Democratic presidential candidate John Edwards? Doesn't a privacy law start to look like it has the potential to squash stuff that suits an awful lot of people in important positions (jobwise I mean)?

Well, the judge sided with the right to privacy crowd and awarded Mosley $120,000, plus his legal costs (which may be another million or so pounds). That's a pretty hefty disincentive to publish in future.

I, personally, would have preferred it if the free speech side of the argument had prevailed. I'm a wannabe American [Prof. Allan is a peripatetic Canadian] in my attachment to wide open, vigorous free speech. I think good consequences for society follow from forcing people to have thick skins. And (as the Mark Steyn saga in Canada shows) a lot of well-intentioned limits on free speech collapse into elites telling the rest of us what we can and cannot say. If we're going to err, I'd err every time on the side of letting you say what you feel like and leaving it to others to rebut you.

Worse than that, though, far worse, is how this came to pass in Britain. Did they have a big debate about where to strike the balance between privacy and free speech concerns? Did they have select committee hearings around the country, or the kind of informed second-reading debate that preceded the liberalisation of abortion laws in Britain? Nope and nope.

In fact there isn't any privacy law in Britain. Or rather, the law that exists flows from the top English courts interpreting the European Convention on Human Rights. It flows from a bunch of unelected judges telling us how they, the judges, happen to think society ought to balance these two rights. The issue was never addressed by Westminster. It's yet another example of the far-reaching -- and if you like to make these decisions yourself as a voter, then the negative -- effects of a bill of rights.

When proponents of bills of rights are trying to sell these things they only ever deal in vague, feel-good generalities. They never tell you that you're signing over these sort of "how to balance privacy against free speech" decisions, and a myriad others, to the judges. And why is that remotely attractive? As Max Mosley might say, "Beats me". [Very good, James, very good]


Government intervention in grocery sales??

By Henry Ergas

Another day, another Australian Competition and Consumer Commission backflip. Only weeks ago, ACCC chairman Graeme Samuel told the ABC's 7.30 Report that "there would be very few observers in the marketplace that would say to you, 'Coles and Woolworths are not vigorously competing against each other."' Now, in a somersault worthy of an Olympic gold medal, Samuel has concluded that "the grocery market is workably competitive. That term is used to describe a market in which competition exists but it is definitely not as competitive as it should be."

This statement stands 40 years of Australian competition law on its head. Since 1976, workable competition has been the touchstone of Australian competition law. Recognising that perfect competition is rarely, if ever, of this world, the then Trade Practices Tribunal, in a decision repeatedly endorsed by the Federal Court and the High Court, determined that workable competition is pretty much as good as it gets: simply put, a workably competitive market is one that is doing exactly what we want markets to do.

Of course, the ACCC chairman is free to define words as he wishes. As Humpty Dumpty famously said, "When I use a word, it means just what I choose it to mean, neither more nor less." But what Samuel is doing is redefining the benchmark at which government intervention is justified. Until now, it has been widely accepted that where markets are workably competitive, governments should let them be. Samuel wants to push that boundary back, extending the oil slick of intervention that began with FuelWatch.

It is true the interventions proposed for retail grocery are far more light-touch than those involved in the FuelWatch scheme. Indeed, they look like the interventions governments make when they know that they really shouldn't intervene at all.

This is especially so with the GroceryChoice website. The trouble with GroceryChoice is that there is no simple way of comparing prices between supermarkets in a manner that will be of much use to individual shoppers. Supermarkets carry tens of thousands of individual products; there are innumerable issues of comparability between products, accentuated by differences between stores in their reliance on own brands; for many products, especially fresh produce, quality matters greatly and varies between retailers in ways difficult to measure; prices fluctuate daily and weekly, all the more so as a result of specials, promotions and mark-downs; and consumers differ greatly in their shopping baskets, so comparisons informative for one are of no value to another.

But even putting myriad practical considerations aside, it is reasonable to ask why taxpayer dollars should be used for this purpose. What is the market failure that GroceryChoice is intended to correct? Samuel has been clear on this point. Launching the site, he declared that "before today, (consumers) didn't have any information". Lack of consumer information supposedly reduces the pressures on stores to compete, perpetuating what the ACCC describes as muted price competition.

The problem with Samuel's claims is that even going on the ACCC's own report, they have no basis in fact. Far from lacking price information, the report finds that consumers are deluged with material advertising prices and that "a significant number of consumers do use the prices of specific items to choose the grocery store they will visit". As a result, the ACCC concludes, "the majority of consumers either compare prices on a limited range of products shortly before visiting the store, or compare prices over a longer period of time".

Indeed, retail grocery consumers are uniquely well placed to make price comparisons. Grocery shopping is a repeat activity that accounts for a substantial share of household expenditure. Shoppers are frequently exposed to prices and have incentives to invest in being well-informed. Additionally, most shoppers buy regularly in more than one type of store: say, doing a large shop at a main chain and then topping up with purchases from an independent. They therefore observe prices across outlets and can switch their purchases in line with changes in competitiveness.

As if all this were not enough, the ACCC's own theory about why price competition is muted relies on consumers being both well-informed and willing to switch. The theory says that no chain has an incentive to cut prices as its competitors will readily observe that cut and follow suit to avoid losing customers. But if customers are poorly informed and hence unlikely to switch, as Samuel claims, no such loss of customers would occur and price-matching would be irrational.

This is not to suggest the ACCC's claims about muted competition are correct. In fact, the ACCC finds that promotions are extremely frequent, especially on items that consumers regard as significant. Moreover, quite unlike what would happen in a cosy oligopoly, there is little sign of the main chains following each other's prices up; rather, prices that are above those of a main rival get cut. This asymmetry in price response, together with the speedy pass-through into prices of changes in costs, suggests a market that is strongly competitive, rather than one trapped in oligopolistic price rigidity. Last but not least, there is vigorous competition on location, quality, range, layout and convenience.

No less questionable are the ACCC's strident criticisms of Metcash, the main wholesaler to the independents. Metcash, the ACCC implies, acts as a monopolist, undermining the independents' ability to compete. This is fanciful. Metcash arose from mergers that were approved precisely because they would create a wholesaler large enough and capable of exercising sufficient discipline over retail outlets to achieve scale efficiencies and reverse the precipitous decline in the independents' market share. This is what Metcash has done and has every incentive to do.

The best that can be said is that though the analysis on which it is based is shallower than a Murray dam [good one, Henry], GroceryChoice does not seem as harmful as FuelWatch. But surely the public can expect better of the competition regulator. Is the ACCC really incapable of looking at a market without wanting to tinker with it? Why wouldn't the ACCC give frank advice that gimmicks such as GroceryChoice merely waste taxpayers' money?

The ACCC is vital to our economic future; it is important that, like the Productivity Commission, it acts with rigour and independence. Until it does, governments will view it as a soft touch, sure to come up with solutions that are as superficial as they are politically convenient. If the present ACCC allows itself to be reduced to that, it will not only have failed the Australian community but also undermined, perhaps fatally, the standing that the careful and patient work of its predecessors so successfully allowed it to acquire.


Another misguided welfare scheme

Arnhem Land leader Galarrwuy Yunupingu has called for the abolition of the federal Government's longstanding Aboriginal employment scheme, labelling it a welfare trap that is "killing Aboriginal people". Heated debate about the future of the Community Development Employment Projects, currently under review by the Government, dominated the annual indigenous Garma festival which wraps up tomorrow in East Arnhem Land.

Mr Yunupingu sparked furious debate among academics and those working in the Aboriginal service industry yesterday when he labelled CDEP a "weapon" that had been used to trample Aboriginal people's rights and deny them access to the real economy. The employment project -- founded in the late 1970s and designed to be a welfare-to-work transition scheme -- was premised on the belief that "money spoils blackfellas", Mr Yunupingu said at an economic development forum at the festival yesterday.

"CDEP is one hell of a weapon to take Aboriginal people's rights," Mr Yunupingu said. "It's a killer. It's worse than bashing women, it's worse than bashing children, it's worse than drugs. "I would like to take every dollar of CDEP and build a training school and give skills to our people for their future."

He was backed by Aboriginal academic Marcia Langton, Melbourne University's chair of Australian indigenous studies, who said CDEP should be "absolutely dispensed with" and replaced by proper training for indigenous people. Professor Langton said the CDEP scheme, under which Aboriginal people can work up to 16 hours each week and get paid an average of $240, had become a welfare trap.

In contrast, the research director at the Australian National University's Centre for Aboriginal Economic Policy, Jon Altman, said labelling CDEP wages "sit-down money" was insulting and misrepresentative. While he agreed CDEP was not working in many instances as an indigenous training program, he said abolishing it would disempower communities and jeopardise indigenous cultural programs. The Government last month lifted a moratorium on CDEP instituted by former indigenous affairs minister Mal Brough. Its review into the future of CDEP is due to report in October, but it has indicated its new-look CDEP will not be instituted until July next year.

Jenny Macklin attracted praise for being the first indigenous affairs minister to visit Garma, which is in its 10th year. She camped with her staff at the festival site and held private talks with Mr Yunupingu, Cape York leader Noel Pearson and Labor politician Warren Mundine. "It is very significant that she was able to camp with us," Mr Yunupingu said. "There is a real minister for you."


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