Viacom Sues Google -- Now What?

Everyone knows the what, and few people are surprised, although the amount does make one giggle in shock -- but what does this mean?

The core legal issue here is the "Safe Harbor" provision of the Digital Rights Management Act, which indemnifies online service providers when their users infringe copyright law by storing protected materials on their servers. The idea is that there's not much a provider can do to stop the individual, so only the individual is liable, not the provider.

What Viacom maintains is that, in this case, YouTube is profiting from the infringing materials, so Safe Harbor doesn't apply to them. Viacom has demanded that YouTube remove some 100,000 pieces of copyrighted materials from their servers, but YouTube is just not moving fast enough in bringing them down, nor are they proactively preventing users from uploading new material.

YouTube responds that they do not allow advertising on user video pages, in order to comply with the spirit of Safe Harbor (that is, not profit directly), although one could easily maintain that existentially, YouTube profits when the system is widely known to allow protected material. In practical terms, that means that if I remember a great "Family Guy" bit and want to see it replayed, I know I can get it on YouTube -- and as of today, that's still true. (Careful when clicking on this link -- this clip could be construed as very disturbing for some people.)

OK, so now what the technical issue is and what it means, but what does this lawsuit really mean? On the one hand it's hard for Google to control their users. If their users infringe, they're gonna infringe, so what can they do? That's not a good argument, says Viacom -- it's your service, you're making money off these videos, so we want our cut, and if you can't pay us, then take them off -- and it's up to you to figure out how.

Google is reported to be working on a search function to identify protected content on both Google Video and YouTube, but they're not there yet. So what can they do in the meantime? Go to signup-only model so they can control users better? That could cut down their reach significantly. Review every video that users upload? That would create a backlog months long, on the optimistic side.

When you get right down to it -- meaning using your "follow the money" instincts -- this must have something to do with the failed negotiations between the two parties to allow YouTube to carry Viacom clips. Google apparently wasn't going to pay Viacom to their satisfaction, so Viacom might very be using this lawsuit as a negotiating tool. Pay us now, Google -- or you'll pay us later. But either way, you're going to pay us. (Wow, maybe the "Family Guy" clip is a propos, after all!)

I predict the lawsuit does not proceed to fruition. It can't -- YouTube risks sinking an entire online marketing channel if they fight and lose. Google will settle, and it'll cost them.