Creative Industries under threat: AI, copyright and the Government’s response

The Communications and Digital Committee’s 2026 report, AI, Copyright and the Creative Industries, warns that generative AI presents significant risks for creators and rightsholders. In particular, it highlights concerns around the unlicensed use of copyright works, limited transparency over AI training data, and the growing market impact of AI-generated content.

The Report calls for stronger protections for creators, clearer obligations on AI developers, and a fairer licensing framework. The Government’s response stops short of immediate legislative reform, but commits to further consultations, taskforces and reviews intended to balance creator protection with responsible AI innovation.

On 6 March 2026, the Communications and Digital Committee published its report, AI, Copyright and the Creative Industries (the Report). The Report concludes that generative AI poses a significant threat to the creative industries, primarily because protected works may be used to train AI models without consent, payment or adequate transparency.

According to the Report, this lack of transparency leaves rightsholders unable to determine whether their works have been used and, where they have, makes enforcement difficult. It also warns that creators risk losing control over the exploitation of their work while competing in a market increasingly shaped by AI-generated content.

The Report recommends a series of measures designed to protect creators’ livelihoods while supporting a sustainable AI market.

Key recommendations in the Report

• Rule out a general text and data mining exception. The Report notes that some technology sector stakeholders have advocated for a broad commercial text and data mining (TDM) exception, which would allow copyright-protected works to be used to train generative AI models. It recommends that the Government make clear that no such general exception will be introduced.
• Close gaps in protection for identity, style and digital replicas. The Report calls for stronger protection against unauthorised digital replicas, including AI-generated outputs produced “in the style of” a creator’s work.
• Make AI training data transparency a statutory obligation. The Report recommends a clear and mandatory transparency framework that enables rightsholders to understand how their works are used, without imposing disproportionate burdens on developers.
• Create the conditions for a fair and inclusive UK licensing market. The Government is encouraged to support a sustainable licensing ecosystem for AI-related content use, rather than relying solely on one initiative such as the proposed Creative Content Exchange pilot (the CCE).
• Champion technical standards for control, provenance and labelling. The Report recommends prioritising technical tools that help rightsholders reserve their rights, track data provenance and label AI-generated content, with legislation introduced where necessary.
• Prioritise UK sovereign AI models. The Report suggests that the Government should support UK-based AI systems that offer stronger transparency and greater respect for copyright than some overseas models.

The Government’s response

On 15 May 2026, the Government published its response to the Report. It confirmed that it will not introduce copyright reforms until it is satisfied that any changes would meet its objectives for the economy and UK citizens. Instead, it identified four priority areas for further work.

Key areas of Government focus

• Digital replicas. A consultation will be launched in the summer to consider how best to address harms caused by unauthorised digital replicas, including the reproduction of an individual’s likeness without consent, while preserving space for legitimate AI innovation.
• AI labelling. A taskforce will be established to develop best-practice proposals for labelling AI-generated content, with an interim report expected in the autumn.
• Creator control online. The Government will publish a review of standards, technical solutions and best practice relating to input transparency for AI model training. The review will identify gaps in the current framework and consider whether further action is needed.
• Support for smaller creative organisations. A working group will assess whether the Government should support independent and smaller creative organisations in licensing their content.

The response also notes that the CCE is intended to operate as a secure online marketplace for licensing cultural and creative assets, with a pilot already underway. In addition, the Government launched the Sovereign AI Unit in April 2026, backed by £500 million in investment and R&D funding to support UK AI businesses.

What does this mean for businesses?

Generative AI is testing the boundaries of the existing legal framework for protecting creative works. Businesses in the creative sector should understand the tools available to protect their content from unauthorised use, including contractual controls, licensing arrangements and emerging technical measures.

Businesses developing or deploying AI should also take a forward-looking approach to copyright risk. This includes considering licensing, data provenance and transparency throughout the development process, particularly while the legal and regulatory landscape continues to evolve.

If you operate in the creative or AI sectors and are concerned about content ownership, licensing or the impact of generative AI on your business, please get in touch. Our IP team, one of the largest outside London, can provide tailored advice to help you navigate this fast-moving area.