Safe Harbour is used by many technology intermediaries to remain either unlicensed or under-licensed. They are operating without the full consent of rightsholders, by definition causing them direct economic harm, while also damaging both fully-licensed competitors via unfair competition and the economy as a whole by provoking parasitic rather than Pareto-optimal growth. That consent is an essential element of an efficient economy relies on the ‘Pareto efficiency test’, which states that if an outcome is to be judged efficient and society is to become wealthier, some must become better off without others becoming worse off. Since no rational person would consent to being made worse off in a voluntary transaction, Pareto-optimal growth requires the consent of parties to economic transactions. It may be contrasted with ‘Parasitic Growth’, in which one person (the parasite) becomes better off at the expense of another. Such growth is in practice primarily a transfer from one to the other: a negative sum outcome that decreases society’s wealth as a whole.
Author(s):Robert Ashcroft and Dr George Barker
Year of publication:2014