UK Government Drops TDM Opt-Out Proposal, Adopts Status Quo on AI and Copyright

Summary

The UK Government published its statutory progress report on AI and copyright under Section 137 of the Data (Use and Access) Act 2025, confirming that it would not introduce a text and data mining exception with an opt-out mechanism for rights holders. After years of consultation during which the proposed TDM opt-out had drawn fierce opposition from the creative industries, the government settled on a monitoring and voluntary licensing path rather than legislative intervention.

What Happened

The Data (Use and Access) Act 2025 had required DSIT, DCMS, and the Intellectual Property Office to report to Parliament on progress toward an agreed framework for AI and copyright. The March 2026 statement fulfilled that obligation with a conclusion that disappointed AI developers who had hoped for a broad statutory TDM exception: the government declined to create any new copyright exception for AI training, opting instead to rely on the existing legal framework and encourage the market to develop voluntary licensing solutions.

The government cited several factors for its decision. The Getty Images v. Stability AI ruling the previous November had demonstrated that UK courts were capable of addressing specific AI copyright disputes under existing law, removing the urgency for legislative clarification on the weights question. International divergence — particularly the different approaches being taken in the US, EU, and Japan — argued for caution rather than unilateral reform that could disadvantage UK rights holders in cross-border negotiations. The government indicated it would continue monitoring licensing market development and reserved the right to legislate if voluntary frameworks failed to emerge at scale within a reasonable period.

Why It Matters

The UK's decision to hold the status quo is a significant policy defeat for AI companies that had lobbied intensively for a broad TDM exception modeled on Japan's liberal approach. It leaves UK AI development subject to the same copyright law that has been generating US and EU litigation, potentially disadvantaging UK-based AI companies relative to jurisdictions with more permissive frameworks. For rights holders, the decision preserves maximum legal leverage without requiring litigation in every case — the existing law applies and the licensing market must negotiate in its shadow. The statutory monitoring obligation means the question is not permanently closed; if voluntary licensing frameworks fail to develop, legislative intervention remains on the table.