In the ongoing case of Viacom against Google, one of the keys is whether or not Google/YouTube have protection under the DMCA safe harbor provisions, which are supposed to protect service providers from the actions of their users. This is an important, because without those safe harbor provisions, the increase in liability would basically cripple all kinds of internet service providers. For an example, just look to Australia, where an ISP was found liable for content its users hosted, leading another ISP to delete all multimedia files hosted by its users every night (these are only the files hosted on their web accounts, not on their home computers, obviously). Yes, every multimedia file -- even if those files were perfectly legal. Record your own kid singing happy birthday and stick on your site? Gone. It might be infringing and this ISP doesn't want to risk the liability. That's why safe harbor provisions are there in the first place: to avoid that type of ridiculous situation. Yet, with Viacom trying to completely wipe out the safe harbor for any company that makes money providing services to users, it would effectively cripple much of what can be done on the internet. Of course, in the end, that will hurt Viacom even more, by limiting the usefulness of the internet as a distribution mechanism -- but the entertainment industry isn't exactly known for its long term strategic thinking.
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