Dennis Jernberg has an interesting article at The Space Helmet Show on file sharing. While it is overall an excellent article, it is here that he slips up:
“If it sounds like theft, it is.”
Legally, file sharing is not and has never been theft. The harm associated with theft is always a real loss and includes the inability of others to use the original item. The harm of file sharing, on the other hand, is all conjectural, based on our understanding of economics: we expect that a certain amount of money would have been made by the owners of the property had the file sharers not gotten it for free. From a common-sense standpoint, we imagine that if they had not gotten it for free, they would have had to buy it. This is a logical and perfectly reasonable expectation, so we do not question it. However, this common-sense approach is false.
Economic theory tells us that many people who would download something for free would not in fact pay full retail price, preferring to go without. In short, some of those who benefit from file sharing would never have been paying customers in the first place. They only took the shared item because it was free. Accordingly, punishments for theft and violation of intellectual property rights by copying are not the same.
Statistically, it is impossible to avoid the conclusion that economic harm is caused to owners of intellectual property by file sharing. There is a counter-argument that harm is mitigated by the increased exposure caused by file sharing, but it is difficult to prove that the value of the publicity generated exceeds the losses involved – while it sometimes may, very often it will not, making the argument a dubious proposition.
However, the path from population-wide statistical certainty to punishment is murky at best: applying such statistics at an individual level results in unwarranted inferences. On the whole, file sharing will cause some harm [not much, according to this study], but it’s impossible to say that a given instance has actually caused damage – if a product is no longer free, some will buy it anyway, and some won’t. How can we determine which part of the population someone falls into? We can’t, until they make that choice. The indeterminate nature of of the matter belies glib simplifications such as, “sharing is theft, and theft is wrong.”
The law, of course, does not concern itself with such uncertain, philosophical matters. However, given that the same economic theory that justifies punishment raises the specter of uncertainty, legal professionals cannot afford to ignore this issue entirely. The very first cases against IP violators in the US all involved a spectacular number of violations – even if any one violation might or might not have caused harm, the sheer number of infractions made it statistically “certain” that overall, harm was caused.
I would revise Mr. Jernberg’s statement to read, “If it sounds like theft, it may not be – but it is still probably illegal.”