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Much attention has focused on Australia’s proposed encryption laws to try and contain Google and Facebook in recent weeks, and now the backlash has begun to grow further. One leading global credit agency, Fitch, highlighted what it believes could be an ‘overall negative impact.’

The stark warning from Fitch will send shockwave ripples through the politicians trying to usher in these laws. Australian security officials are demanding measures to get around the encrypted services of leading tech companies.

Detailing its concerns in the Fitch Solutions Macro Research report that came out earlier this week, Fitch told its clients that there will be risks ahead if Australia goes down this path. The credit agency described these proposals as ‘negative for Australia’s tech sector, but they will have the most impact globally, as they target international companies.’

Fitch’s notes suggest that other countries are likely to follow suit if Australia presses ahead with these measures. According to the company, this could ‘increase the threat of non-state actors,’ where an organization is able to exert political influence without having ties to any state.

This is the first time that any credit agency has chosen to wade into this debate, and Fitch’s comments should cause some consternation for Australian politicians, who now need to decide how much of this policy that the market will lead due to the risk of kickbacks.

However, intelligence chiefs in the country have been quick to decry any claims that there are issues with the proposed laws around encryption. Mike Burgess, Head of the Australian Signals Directorate, said that ‘claims about the ‘dangerous’ nature of the act’ are ‘hyperbolic, inaccurate and influenced by self-interest rather than the national interest.’

That said, a great deal of confusion still remains around these laws, which has led to many large companies seeking legal advice regarding whether their current stances are going to be compliant. The lack of consistent clarity has led some to question the official communications strategy and whether it is understandable enough.

Some of the big tech companies have also joined together to release a retaliatory statement through the Reform Government Surveillance coalition, a lobbyist movement. Representing Apple, Microsoft, Google, Dropbox, Evernote and Twitter, the group said that the proposed laws are ‘deeply flawed, overly broad and lacking in adequate independent oversight over the new authorities.’

These developments are coming hot on the heels of the Australian Competition and Consumer Commission (ACCC) railing against what it feels are unfair Google and Facebook algorithms disrupting traditional news cycles. The ACCC said that the tech giants have created filter bubbles that do not let in a wide enough range of views based on user viewing habits.

While Facebook and Google are known to be unhappy with this and could seek counsel over the ACC’s demands for their algorithms, many Australian media organizations have welcomed the action, saying that it offers more fairness for local journalists and can help fight the rise of so-called fake news.

Meanwhile, in more tough news for the Australian tech sector, the Australian Taxation Office is set to step in to close loopholes used by some of the major banks to maximize the availability of research and development concessions.