Category: Bad Stuff

The Hargreaves Report, entitled Digital Opportunity, A Review of Intellectual Property and Growth, has already been extensively covered in a land rush of people wanting to get an early comment out there. The feedback has generally been good though not from all quarters as this response from the Business Software Alliance shows.

It is difficult to provide objective comment on the report without simply been seen to be replicating parts of it as its 130 pages are well written and provide their own concise summary. Also the document took 5 months to compile and a 30 minute read is not going to result in an analysis that would not be bettered by reading the report itself.

It was however interesting to note that the first point brought out by Prof Hargreaves was something I wrote about yesterday following the Nominet Policy Forum which is the need to base policy on evidence:

“Government should ensure that development of the IP System is driven as far as possible by objective evidence.”

“The frequency of major reviews of IP (four in the last six years) indicates the shortcomings of the UK system. In the 1970s, the Banks Review deplored the lack of evidence to support policy judgments, as did the Gowers Review five years ago. Of the 54 recommendations advanced by Gowers, only 25 have been implemented. On copyright issues, lobbying on behalf of rights owners has been more persuasive to Ministers than economic impact assessments”

He specifically highlights the lack of evidence when addressing the problem of online copyright infringement:

“The uncertain and disputed nature of the prevalence data makes it difficult to reach confident conclusions about the impact of copyright piracy on growth. This assessment is complicated further by a number of other relevant points:

• not all illegal downloads are lost sales – the user may not have paid a higher price for a legal copy absent cheap or free illegal versions;
• money not spent on legal copies is not lost to the economy – it may be spent on other purchases. This is of no comfort to the sector suffering losses, but the effects across the economy will not necessarily be problematic;
• even within the industry affected, purchases prompted by experience from an illegal copy (for example, concert tickets or other merchandise) can offset losses; “

“Most experts we spoke with and the literature we reviewed observed that despite significant efforts, it is difficult, if not impossible, to quantify the net effect of counterfeiting and piracy on the economy as a whole.”

Hargreaves concluded that the government should not “do nothing” re this particular problem but that Ofcom should urgently go about building an evidence mechanism that will be useful in determining the efficacy of the measures proposed in the Digital Economy Act – because it plainly is not there yet.

To a large extent Hargreaves has performed the due diligence that was not done during the passing of the Digital Economy Act. It is a shame it is a year too late.

You can download the report here – as government sponsored studies go it is one of the better reads.

I have cherry picked more of the report as pertains to the Digital Economy Act here if you want to save yourself the trouble: