What is Externality?

A benefit or harm that one person's economic activity causes to third parties who did not take part in the transaction, and that is not reflected in the price. With a negative externality the harmed party receives no compensation (for example, noise, pollution); with a positive one the benefiting party pays nothing (for example, bees feeding from a neighbour's orchard). Because the price does not take such consequences into account, the market allocates resources incorrectly: a good with a negative effect is produced more than needed, and a good with a positive effect less than needed. That is why the state intervenes through taxes, fines, subsidies or standards.

Source: Britannica: spillover (economics); Externality (Wikipedia)