Why YouTube Is Perfectly Legal (And Why Content Companies May Like That)

from the rethinking-Mark-Cuban dept

For all of Mark Cuban's talk about how YouTube (or whoever bought them, such as Google) would get sued for breaking the law, it's never been at all clear that that was true. As has been noted, it appears that the official legal process (notice and takedown) is working fine and that protects YouTube against most lawsuits. Tim Wu, over at Slate, goes through the details of why YouTube is protected against infringement lawsuits, including the history of the legal clause that kept service providers exempt from being liable for the actions of their users. Basically, entertainment industry lobbyists tried to push through laws that would have made any service provider responsible, which likely would have choked off any advancement of the internet. Telco lobbyists, however, turned things around and convinced Congress of the necessity of a safe harbor. It probably wasn't a very difficult argument. Why should a company be directly responsible for what someone else does, especially if they are required to correct any problems as soon as notified?

Wu digresses a little in noting that it's the very law the telcos pushed for that now protect their "foes" in the net neutrality battle -- but that has little to do with anything here. It was clearly was, and still is, in both their interests not to have liability for the actions of users. What's much more interesting is his suggestion that content companies have grown to like the "notice and takedown" procedure that lets them force a company to take down infringing content. He says it's allowed them to create a separate classification of content use that isn't "fair use" but "tolerated use." Basically, companies can make their own decision as to whether or not to recognize that the exposure actually helps them. Or, at whatever point they want to, they can simply snap their fingers and force the content to come down. Unfortunately, I don't think most big content companies view it this way. They simply have trouble coming to terms with the idea that another service can help give them publicity and value without any formal business relationship -- though, as more examples of it happening show up, the tide will eventually turn.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Eric, Oct 26th, 2006 @ 8:28pm

    YouTube Is Free Advertising

    Why would content providers complain if YouTube is providing free advertising for them. Companies are idiots when it comes to the internet.

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, Oct 26th, 2006 @ 8:29pm

    I hate modern corporations.

    reply to this | link to this | view in thread ]

  3. identicon
    Kevin SMithers, Oct 26th, 2006 @ 9:05pm

    To continue what Eric said above, infact alot of companies are using YouTube and other such sites for viral marketing so why would they complain!

    reply to this | link to this | view in thread ]

  4. identicon
    Eric, Oct 26th, 2006 @ 9:27pm


    Because they have old geezers that don't have a clue. BTW, I'm 54 years old and I, at least, have a little bit of a clue. These people are still living in 1995 and they think they can still have it the old way. LOL

    reply to this | link to this | view in thread ]

  5. identicon
    pwb, Oct 26th, 2006 @ 9:35pm

    It still seems to me that YouTube may even have some fair use support.

    reply to this | link to this | view in thread ]

  6. identicon
    novernetsbandit, Oct 26th, 2006 @ 10:46pm


    So what is the out come in the long run? As long as YouTube doesnt actively allow or use copyrighted material but there users do there ok?

    reply to this | link to this | view in thread ]

  7. identicon
    Rob Hyndman, Oct 27th, 2006 @ 2:26am

    Mike, as I expect you know the safe harbor is only available if the provider has no knowledge of, and derives financial benefit from, the infringing activity. Tim skirts around this, mentioning only: “Of course, as with any law, YouTube’s legal status might not be 100-percent airtight. The law suggests (in §512(c)(1)(A)(ii)) that YouTube might be liable if, in the absence of notice, it is “aware of facts or circumstances from which infringing activity is apparent.”

    "Might not be 100% airtight"? Heh. Look, I want Google to be clear of problems on this too, but the law is pretty clear on this. Is anyone on the planet unaware? The issue for YT is how it monetizes content from which it is not permitted to derive financial benefit if it is to get the benefit of the safe harbor. And of course, how it can claim to be unaware, infringement being epidemic on the site, and notorious.

    So far, all of the commentators I’ve read have sidestepped that issue.

    reply to this | link to this | view in thread ]

  8. identicon
    darryl, Oct 27th, 2006 @ 2:45am

    Re: YouTube Is Free Advertising

    OK, I'll give your car/bike/dog/wife/house away, but don't worry, it's free advertising for you...

    reply to this | link to this | view in thread ]

  9. icon
    Mike (profile), Oct 27th, 2006 @ 2:53am


    The issue for YT is how it monetizes content from which it is not permitted to derive financial benefit if it is to get the benefit of the safe harbor.

    Yeah, well, no problems there, since YT seems to barely monetize at all. :)

    However, that is a valid point, but I still think Google/YT can mount an effective argument against that. If simply placing ads around content is enough to lose safe harbor, than just about anyone would be losing the safe harbor. It would mean that, say, a forum site that had ads would lose safe harbor if someone posts infringing material on the site.

    If I were the lawyers, I'd make the argument that YT/Gogole is not monetizing *the content* but the visitors. Perhaps it's a slippery slope, but I think that if you accept that a few ads alone lose your safe harbor protection then it effectively kills nearly any safe harbor defense.

    And of course, how it can claim to be unaware, infringement being epidemic on the site, and notorious.

    Here, again, I believe there are two issues. I don't believe they claim to be "unaware" that there's infringement on the site, but that doesn't mean they're aware of each specific case. It's a fine point, but it's important. If they become aware of specific cases (which is the purpose of notice & takedown) then they follow through. Or, if they're actively encouraging infringement (which they're not).

    As with anything, it'll all shake out in court eventually and will depend on the lawyers' arguments and the specific judge(s), but I think they can make a pretty good case for safe harbor. It may not be a slam dunk, but I'd put the odds on Google/YT.

    reply to this | link to this | view in thread ]

  10. icon
    Mike (profile), Oct 27th, 2006 @ 2:57am

    Re: Re: YouTube Is Free Advertising

    OK, I'll give your car/bike/dog/wife/house away, but don't worry, it's free advertising for you...

    It really troubles me that so many people don't seem to understand the difference between rivalrous and non-rivalrous goods. The whole point is that you can give away content with no loss. You can't do that with tangible goods.

    reply to this | link to this | view in thread ]

  11. identicon
    Rob Hyndman, Oct 27th, 2006 @ 3:20am

    Re: Re:

    Look, I can justify my being up and posting now because I'm on the east coast. Is it just your servers that are on the other coast, or are you posting at 3 am?


    Understand your arguments, and agree it's not clear one way or the other. But I think many commentators have been glossing over those points and suggesting an easy time for Google, and it's precisely those points that raise the issues.

    Eg, on the advertising, it doesn't make much sense to me that if 50% of the content on YT is infringing (and I have no idea what it is, but just for argument's sake) that it could argue that the advertising shouldn't expose it to liability. A site that posts ads and has some minor infringing content seems different to me than a site that has substantial infringing content and generates revenue from visits to that content. At some level it seems to be that it ought to be about scope. Which I think would cause YT problems.

    I think the same argument could well apply to the second point you make. It's certainly arguable, but it seems unreasonable to hold, in an environment where infringement is epidemic (assuming it is) that one must still have actual knowledge of each specific case. I understand the implication of a notice and takedown system, and the effect of putting the onus on the rightsholder, but it seems to me that there must be a limit to the scope of the infringement for that to be the case. Perhaps not, we'll see.

    Fair points for discussion, to be sure, but at the end of the day it seems a stretch to imagine the safe harbour being meant to be used to shelter large scale infringement that generates substantial revenue for the operator.

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, Oct 27th, 2006 @ 5:14am

    YT is aware that its users post copyrighted material? sure. but how do you monitor it? YT has how many videos? how many submitted a second? i am wondering what kind of research team they would need to review every video uploaded, and make sure it's not (c) someplace. just not practical. however, i believe the the takedown notices are a way to go. it gives room for "actions" to take place.

    you have a (c) work on your site, take it down.
    um..let me look..... yup. (c) work. must go down. GONE
    we'll get back if we see any more (c) work....

    reply to this | link to this | view in thread ]

  13. identicon
    Lala, Oct 28th, 2006 @ 12:14am

    my prediction

    is that few copyright holders will actually oppose YT/google in court. I would forsee alot of cease and desist letters for the uses that are interfering with their own official supported content which will start to spring up. So Jay-Z's folks give notice to YT to take down all of the videos taped off of BET and then put up "official" versions of the works and everybody wins because its not all fuzzy.

    But...that probably is only forseeable for larger, institutionalized copyright holders. I wonder how the "medium" guy--somewhere in between a pimply kid with a camcorder and MGM deals with it...

    reply to this | link to this | view in thread ]

  14. identicon
    ranon, Oct 28th, 2006 @ 11:36am

    There is another dimension to this. Basically YouTube is so popular because it has generally been or perceived to be free to use and post videos.

    With Google, that perception should not change. If YouTube is perceived as not a free place to post videos, a place where lawyers trawl and takedown notices abound, it will be a big problem for Google.

    My view is that with a big lawsuit, Google will have to put better protection mechanisms in place and will start to loose customers in YouTube,

    reply to this | link to this | view in thread ]

  15. identicon
    Ahmed, Jul 1st, 2007 @ 7:48pm

    Re: I disagree with you Rob Hyndman

    YT is unware of the infringements material he has on his website. The strong position of YT stands on the ground where as a provider he does no editing to any of the material. YT works with TakeDownNotice, and apply it to all users. YT follows the procedure, in which, allow the ISP to provide thier services without being worried about lawsuit as much.
    from my view, I think YT really protected as ISP, and the only mistake it would have done; it would be in the case they agree to inspect material uploaded to the YT site.
    YT claim no knowledge of what it posses on its servers. They don't need to know, and they don't to know either. it is thier only safeguard they would have, if they claim no knoledge at all.

    About themunware, hey, smeone had a study on the precentage of YT material. It has less than 10% infringed material, which means, you as copyright owner must enforce your rights, by reporting to YT about the infringed material.

    reply to this | link to this | view in thread ]

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