Analysis: Viacom Forces Google to Show its Cards

Authored by Scott Goldberg on March 14, 2007 - 8:30am.

The early money says Google will not lose Viacom’s $1 billion lawsuit for copyright infringement. But what may already be lost is a poker hand the search giant had kept close to its chest.

Commentary from third party lawyers indicates that Viacom is likely targeting an ad revenue deal, which Google had apparently been unhelpful in discussing. Perhaps Viacom believed a headline grabbing lawsuit was the only way to push negotiations. For the moment they seem perfectly serious in their intentions to seek a lawful victory, not merely a moral one.

And if the case is as open and shut as its lawyers have indicated, the immediate question is how Google’s counsel so badly misjudged the situation and left themselves open to such catastrophic possibilities. CNET suggested that a Google loss could mean the end of YouTube. That may be a stretch. After all, Google didn’t arrive at its current status playing ignorant chess. They likely knew something of this nature would happen sooner or later. Unfortunately for the Mountain View Boys, however, their strategy is now in the open, and it’s not a terribly pretty one.

Google expects to successfully take refuge in Section 512 of the Digital Millennium Copyright Act, which debuted in Congress in July 1997. Section 512’s “safe harbor” essentially gives clearance to hosting companies that remove copyright infringing material when notified. YouTube’s policy on removing such material is well documented and has been reemphasized by the company a thousand times.

But 512 also has language lying at the heart of Viacom’s case: A hosting company cannot “turn a blind eye to copyright infringement,” as Declan McCullagh with CNET put it. As Viacom’s formal complaint says, “YouTube has failed to employ reasonable measures that could substantially reduce, or eliminate, the massive amount of copyright infringement on the YouTube site from which YouTube directly profits.”

This, too, has been well documented by the media and copyright holders enraged with YouTube’s behavior, and it’s easy to understand the frustration. After all, YouTube exhibits excellent filtering capabilities when it comes to pornography and material from YouTube partners. So why do the same capabilities seem to malfunction when it comes to material from non-partners? And why hasn’t the company been faster to outsource copyright infringing filtering technology to companies like Audible Magic, if they’re so inept at it themselves?

We know the answer to the questions. Google could filter copyrighted material more efficiently, if only they really wanted to. Or, if only copyright holders would bend a little more in their revenue sharing deals. It says a lot about them and the hand they’re ready and willing to play.

Now for the big question: Will Viacom’s action, and Google’s prepared reaction (that came with everything but a smirk) embolden others to act? We’ll see. For now, Google’s reputation is on a slippery slope.

Scott Goldberg

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