Why Google Wanted a YouTube Lawsuit

An anonymous reader writes "After YouTube was purchased for $1.6 Billion, there was rampant speculation that Google would soon be waist-deep in billion dollar lawsuits. Despite the enormous liability issues, Google purchased YouTube for a mind-numbing sum, leaving many doubters wondering if Google considered all of costs involved. A theory has been put forth explaining what Google may have been thinking when it bought the company." From the article "Letting YouTube fight this battle alone with their own lawyers might have resulted in a very public and unnecessary loss that would have crippled Google's video ambitions and possibly caused collateral damage to a bunch of related industries (especially search)." In short, the author argues that Google had a lot more to lose had it kept away from YouTube and let the old-media companies crush it with lawsuits."

Sad that money means so much in the courtroom

[Reverse Gear (891207)]

The sad thing about this is that it actually does make sense that Google should buy Youtube for the reason stated in the OP.

It is really sad how the interpretation has become a matter of who can afford the most lawyers and things like that. I think this is a trend that is seen at it's strongest in the USA but we sure also see this here in Europe and Denmark where I live.
In my simple mind the law should be equal for everyone no matter how much money they have, but that really is being naive these days as far as I can figure.

I don't know if my thinking here is to much influenced by movies like Civil Action [imdb.com], but then again it claims to be based on a true story (and the movie is almost 10 years old, so I guess this isn't a new trend, at least in the US).

Re:Sad that money means so much in the courtroom

[sarathmenon (751376)]

The good thing is that google is waging the war against the mafiaa rather than you and me. File sharing and DCMA are totally different things, but I'll welcome any adversary against the *AA. If they are clipped off from both sides (content and consumers) some good might come out of it.

Face it, google is the best corporation to take this law suit along, much better than say Apple or Microsoft. I agree they aren't perfect, but for all the things that they do, they simply are one of the better choices.

But, will Google really protect us?

[gavink42 (1000674)]

I'm seriously hoping that things remain open, as far as video sharing goes. But, I feel that if Google makes all sorts of deals with the media companies, we're likely to still end up with restrictions on how/what we share.

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[flyingsquid (813711)]

I think it's kind of a contrived explanation, personally. The simplest explanation which fits the facts (that is, Occam's Razor) is that Google saw an internet phenomenon, got dollar signs in their eyes, became worried what might happen if Microsoft bought them instead, and overpaid for something with a lot of potential liabilities.

Companies buy other companies all the time. They frequently do this to make more money, they frequently overpay for them, and they frequently purchase companies which end up hur

Re:

[twistedcubic (577194)]

For a company with intelligent leadership, such as Google, this is not the simplest explanation. However, you are right, if Microsoft bought YouTube, this would clearly be the reason.

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[jforest1 (966315)]

2 letters: O.J.

--josh

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[billcopc (196330)]

Not true... O.J. won because anyone else would have done the same damned thing! What... you thought he'd waltz into court and proclaim "Yeah, I killed that cheating bitch and her dildo friend too!"... hellllll no. Homicidal weirdos do that, something O.J. is arguably not.

Money matters in court when that money controls the law. Actors do not control the law. Politicians control the law. Religion controls the law. CEOs of multinational megacorporations control the law. All the other wealthy but non-in

Re:

[hondo77 (324058)]

It doesn't matter whether you have an average-priced experienced lawyer, or a flashy whiz-bang zillion dollar court jester lawyer, as long as you don't have an idiot lawyer you're still in the fight.

I'm guessing that you haven't seen a public defender in action. It's can be a sad, sad thing.

Re:Sad that money means so much in the courtroom

[hey! (33014)]

Sad it may be, but it is ievitable that money matters in a civil lawsuit. As long as people are allowed to sue to recover just damages, others will be tempted to sue to obtain unjust settlments.

When things come to trial, if our laws are at least reasonably just, then justice has better than even chance. The real problem is the majority of times when things don't come to trial, when defendants pay the plaintiffs to go away; when freedoms are quietly forgone; those are the times that justice is threatened most.

The legal profession should police itself better. It is unethical to use the fear of having to mount a defense to extort money or concessions from people. There is no moral difference between that and using threats of physical force.

Lawyers who are party to legal muggings should be disbarred.

Can anyone confirm?

[by Anonymous Coward]

I tried Googling for their reasons, but results aren't conclusive.

Bad deal

[javilon (99157)]

By this interpretation, Google could have waited for the lawsuits to start and then buy YouTube for very little money, they could have saved a Billion.

Re:Bad deal

[Samuel Dravis (964810)]

But then, you see, the other companies would have already won in court, which sets precedent for all video services. Google bought YT to prevent this from occurring.

Re:

[nine-times (778537)]

Well, either that would have happened, or else people would have held off suing until YouTube was purchased by someone with deep pockets. Either way, it wouldn't have been so easy to wait for the smoke to clear before buying.

Re:Bad deal

[daeg (828071)]

Then they could not have influenced the result with their lawyers. $100 million in legal costs is nothing to Google if it means a favorable "fair-use" ruling.

The thing is, I'm not sure it will go to their plans, or turn out the way they want. They want a fair use ruling that says as long as they comply with take-down notices, they are free and clear despite making money off of copyrighted content (ad impressions until a video is taken down).

A favorable fair-use will basically cement their (and many others') position that indexing and news indexing/aggregation is legal under fair-use laws. An unfavorable ruling, depending on the judges' wording, could be used as very high-powered ammunition against it by companies that think Google News and other services are "stealing" content. It could also spur unintelligent legislation regarding fair-use.

I'm divided. I want fair-use to be very clear under the law, but I don't think what Google/YouTube is doing is right. Slapping users on the wrists and deleting infringing videos obviously isn't enough to deter infringement.

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[91degrees (207121)]

This isn't "fair use". The videos that Viacom has a problem with (at least most of them) are infriging Viocom's copyright. Distributing an entire commercial production is not fair use. What Google want is a ruling that they are not liable for the infringement.

Re:Bad deal

[MindStalker (22827)]

its not "fair use" for whom? If the courts see Google and simply a carrier then the infringement is being done by the users and not Google. As long as Google takes down any infringments upon notice they are abiding by DMCA. So far the really popular videos on youtube have mostly been homemade stuff that sometimes includes a small bit of soundtrack. These are "fair use" under many interpretations, and Google making ad money from these videos is fine.

What would be interesting is if the courts declare that any ad money made from infringing videos has to be collected and given to the owner.

Re:

[Jamil Karim (931849)]

What would be interesting is if the courts declare that any ad money made from infringing videos has to be collected and given to the owner.

YouTube doesn't put any ads on the pages where clips are played. Take a look. They only put ads on the search pages, home page, etc. The reason for this is that if they had ads on clip pages, they could potentially lose the protection of the Safe Harbors under the DMCA. YouTube has been very careful to give itself a legal ground to stand on if they ever went to court.

This article [hollywoodreporteresq.com] explains it much better than I can -- and it is well written. =)

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[MindStalker (22827)]

Nope, the Napster lawsuit hinged on infringing content being their primary content. Napster has SOME legal content, but it was the minority. Youtubes content is primarily non infringing . Go read the Napster case, really the that was the major breaking point was the fact that the infringing content was most of it.

Re:Bad deal

[pla (258480)]

but I don't think what Google/YouTube is doing is right. Slapping users on the wrists and deletinginfringing videos obviously isn't enough to deter infringement.

In a FEW situations (full pre-release TV episodes,) GooTube has some grossly infringing content. That represents a problem they need to address.

For the vast majority of the rest, calling it "infringement" amounts to saying we don't have the right to our own culture.

The crappy low-quality content on YouTube won't deprive anyone of sales. If anything, it will increase sales by reminding people of little bits of their past which they want to recapture (eg, cheesy 80's videos and saturday morning cartoons); It gives the best possible advertising for shows like The Colbert Report; It lets us all make fun of the latest absurdity uttered by the president (or Pelosi, Boxer, or [insert your least favorite politician here], they all count as pretty much equally worthless). Unfortunately, copyright law doesn't care about that - It cares only that the copyright holder (rarely the "artist", so don't even go there) didn't give permission. That must change if copyright will survive the next few years with any meaning at all.

And if we don't see a massive copyright reform in the near future? Well... Ask any 16YO whether or not they consider it "wrong" to copy a CD. Copyright has fallen to the level of speeding as a socially-acceptible crime; we all know we might get caught, we all do it anyway, and we don't care. Except, rather than a $150 fine, you can get a $150,000 fine. Ouch.

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[tgd (2822)]

For the vast majority of the rest, calling it "infringement" amounts
to saying we don't have the right to our own culture.

Yup, and thats the law. Feeling its wrong, having it be common sense its wrong doesn't make it legal.

Changing the law will make it legal.

Re:Bad deal

[NickFortune (613926)]

Yup, and thats the law. Feeling its wrong, having it be common sense its wrong doesn't make it legal.

Changing the law will make it legal.

So in that case you wouldn't mind if someone with deep pockets were to attempt to bring about a change in that law by using its legal muscle to help establish a favourable precedent?

Well, Go Google!

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[dpilot (134227)]

Seems ungood, but then again...

We got to where we are today with copyright law, because "people with deep pockets (??AA) attempted (and succeeded) to bring about changes in that law by using their legal muscle to help establish favorable (to them) legal precedents."

Too bad that ordinary people have gotten completely lost in the shuffle.

We're back to the Renaissance patronage system.

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[NickFortune (613926)]

We're back to the Renaissance patronage system.

Which would make the system broken, perhaps, but doesn't mean that Google is doing a bad thing with this action.

It's nice to see one of the players pushing in the other direction for once. That's all.

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[dpilot (134227)]

I don't disagree what what Google is doing is good.

But the system IS broken, and while Google IS doing good. In the Renaissance, ability pay for materials as well as the basics of life drove the need for Patrons in order to do art and science. Today between the quagmire of I.P Law and the fact that our legal system has become deep-pockets based have driven us back in time, to Patronage.

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[Kjella (173770)]

Except, rather than a $150 fine, you can get a $150,000 fine.

That's the statutory maximum. In reality they'll get the statutory minimum, which is $750. Except it's per work, so for a CD of MP3s (~200@3.5MB) you're back at $150,000.

It's one thing to have something of a hard minimum (if you agree that it should be illegal in the first place...), for example you get a relatively high penalty for stealing $1 of gum and then you should presumably do the same for infringing on 99c worth of IP. Otherwise it is sim

Re:

[jafac (1449)]

Except, rather than a $150 fine, you can get a $150,000 fine. Ouch.

Well, the Romans had a better idea for keeping an orderly society, and bolstering law enforcement. Stiffer penalties. Like slavery. Crucifixion. Forced entertainment (being the star of the weekly "Feed the Lions" show at the coliseum). $150,000 isn't enough to deter these violators. We need some real penalties. After all, the stiff penalties the Romans used worked out so well for them.

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[pla (258480)]

I believe that if people don't have a right to make money off of media they create they'll just stop creating it,

You can believe anything you want, but all of human history up to the past few centuries has proven that idea false. People create because we use it as a form of expression. The fact that we can get paid, for doing something we'd do anyway, just adds frosting to the cake.

If you don't like the historical argument, though, you have counterexamples even in the present. Go to any local club o

Re:

[Random832 (694525)]

Too bad 16YO's can't vote or pass legislation through Congress.

They will be able to vote in two years.

In theory, they will be able to pass legislation through Congress in nine years, through the Senate in fourteen, and past the president's desk in nineteen.

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[Orbruelor (863009)]

Should ISPs be any more liable then as well? If I upload a copyrighted mp3 or avi to my personal account, or rapidshare, or megaupload, etc etc - why should anyone other than the uploader be responsible?

What, you want Singapore's laws?

[Geof (153857)]

I don't think what Google/YouTube is doing is right. Slapping users on the wrists and deleting infringing videos obviously isn't enough to deter infringement

There's litter all over my neighborhood. Obviously current enforcement isn't enough to keep it clean. Should we escalate the penalties until the litter stops? Much of that litter is from the local McDonald's - shouldn't they be doing something to stop this menace? (If I could think of something they could reasonably do I'd be all for it, but I c

I take it back - litter is much worse

[Geof (153857)]

I compared copyright infringement to littering. But every method I can think of for preventing infringement for personal use does more harm (social, economic, and political) than good. I can imagine a world in which there is no prohibition on personal copying - and I think it would be a better world. Of course, that's not the world we live in, and there is some harm done even when a bad law is broken (for some laws, the good of breaking the law may exceed the harm). Litter, in contrast, would still be a

Re:Bad deal

[Don_dumb (927108)]

Yes. Another day, another person who does not have any actual inside information into Google, attempts to guess why they are too brilliant to not have made a mistake buying Youtube.

Big companies CAN make mistakes, I dont know if Google has or not and I have no less insight into Google than anyone else here.

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[BAM0027 (82813)]

That would have been impractical when considering Google to be a public company with stockholders. If they did that, they would have "looked stupid" purchasing a company in the throes of suit, their shares would have plummeted, and public opinion would have been confused. As it stands, they looked great, their stocks benefited from the purchase (IIRC), and they have us marveling at their forethought.

That's savvy, IMHO.

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[freedom_india (780002)]

You are just a Common Stock Holder and not a preferred one. Remember: common stock holders contain only very little voting power versus preferred stock.
So Page can outvote us anytime.
See ya...

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[GundamFan (848341)]

That's interesting... Google bought YouTube to pick a fight with content providers and set a precedent favorable to their business model (and by coincidence the consumer.) But Viacom may only be suing for a cynical money grab.

If the author of the article is right then Viacom just got severely played.

not likely

[by Anonymous Coward]

Google could have filed amicus briefings on behalf of the defendant (they did so a couple years ago when yahoo was being sued).

But the proposition is backwards. youtube had no money or revenue. Google has both. That's a big red "sue me" sign stapled on their back.

Re:not likely

[bWareiWare.co.uk (660144)]

Google could spend millions/billions on amicus filling to defend YouTube, but as soon as it looked like they might win the media companies would cut a deal with YouTube and no legal precedent would be established.

By owning YouTube the can know at least know they might win.

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[Splab (574204)]

Also Google has the money to fight, YouTube could face bankruptcy through litigation. Anyone suing them now knows they better be damned sure they are in their rights to do so or they are in for a world of hurt.

Amicus curiae

[nwbvt (768631)]

Thats why they have Amicus curiae briefs. If Google just wanted to help YouTube defend themselves, they could have filed such a brief for much less than the 1.6 billion (or whatever it was) they spent on YouTube. Or if they really wanted to take an active role in the lawsuit, they could have waited for it to be filed and then bail out YouTube for much less money. Though its questionable whether or not they would have ever been sued in the first place had YouTube not been bought by someone who could pay up.

No matter how you cut it, this would have been a silly strategy. Can we please stop pretending we are on Google's board of directors and posting all this speculative BS on what we think they are doing or will do in the future? Please?

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[$1uck (710826)]

You're missing the point. The lawsuit wouldn't be about collecting a fat paycheck, but about killing the competition and possibly "video online." You tube before had no money and no money to defend itself... Google has lots of money to defend itself, add to that they spent 1.6 billion this says they are going to defend their new purchase with lots of capital.

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[nwbvt (768631)]

Again, the point of an amicus curiae brief is that an outside party like Google could assist You Tube's defense without actually buying them out. The only way this 1.6 billion deal (or however much it was) affects Google's position in this lawsuit is that now if they lose, Google has to shell out even more money to the media companies. And if they really wanted to take an active role in all of this, buying You Tube after the lawsuit would have saved them a lot of money (though then again, its unlikely You

Re:Amicus curiae

[db32 (862117)]

I would guess that it would be a pretty stupid reason to buy YouTube. I imagine the reasons for buying YouTube go far beyond just wanting to be a target for a lawsuit. However, it may have been seen as a bonus possible outcome. "If we buy this, someone might decide to go sue happy on us, and then we can likely crush that nonsense, make a big public showing of the ordeal, and secure our business that drove us to buy YouTube from future assault".

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[Mr. Underbridge (666784)]

Thats why they have Amicus curiae briefs. If Google just wanted to help YouTube defend themselves, they could have filed such a brief for much less than the 1.6 billion (or whatever it was) they spent on YouTube. Or if they really wanted to take an active role in the lawsuit, they could have waited for it to be filed and then bail out YouTube for much less money. Though its questionable whether or not they would have ever been sued in the first place had YouTube not been bought by someone who could pay up.

Why not just pay for the lawyers?

[skubeedooo (826094)]

But the third point -- Expand and protect current fair use related provisions involving copying intellectual property -- is the most important for Google.

If that were the case, google could just donate money to youtube to pay for their legal defence, and not get involved with actually owning the company. It would cost an insignificant amount relative to the $1.6B purchase fee, and they wouldn't have to pay damages in the event of defeat.

Re:Why not just pay for the lawyers?

[slashbob22 (918040)]

Interesting idea, look how well it is working for M$ and SCO. M$ isn't tied to the rise and fall of SCO.

There are two issues with this though:
1) Google has no incentive to continue on the fight, other than their own personal liability on Google Video, and considering it is almost the same thing you may as well own the other company. In the M$ SCO case, it's plaintiff not defendant that M$ is supporting.
2) Iff Google spent a tonne of cash on YouTube in defence and won, YouTube would undoubtedly be worth a lot more and likely be a prime candidate for purchase as their liability aspects had been tried out in court.

My $0.02

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[ajs318 (655362)]

Google are playing to win. Plus they'd so rather YouTube didn't exist than belonged to somebody else, that they are prepared to be holding the package when it blows up in their face.

If they just paid YouTube's legal costs, and YouTube won, then YouTube would have ended up being worth even more than Google already paid for them -- and someone other than Google would end up owning YouTube. Not that anyone would be suing YouTube if they weren't owned by somebody rich; prior to the Google purchase, YouTube ha

Righttttttt

[Timesprout (579035)]

Thats why they paid over the odds for a company begging to be sued so they could turn it into a target too rich to resist.

Its far more likely Google wanted to be a dominant player in a market other than search so badly they forked out the $1.6 billion knowing a lawsuit would likely follow if they could not negotiate a quick settlement and apparently in the process overvalued not just youtube but also the amount of clout they hold with the content providers.

It was an act of hubris not a brilliant strategy!

[divisionbyzero (300681)]

I'd bet money that Google bought YouTube to get face time/leverage with television/movie execs. Google has failed miserably to get the entertainment folks on board. I think they made an expensive gamble that they could leverage YouTube to get the studios on board and they lost.

Re:YES THEY DID

[demastri (579215)]

If a company issues stock for a purchase, it dilutes the existing stock base, so it isn't like they're creating value out of thin air. if 100 shares exist, and the company's worth $100K, the shares are worth 1K each. If they print another 100 shares, all 200 are worth $500 each. Usually, stock used for purchase is already "printed" but part of the reserves of the company, so it doesn't devalue the shares, but that actual value of ownership (just as if it had been bought at market with cash) transfers to

Re:

[mbrod (19122)]

It is not even close to being cash. They are giving the owners of YT ownership in Google. If it was cash they would be giving the owners only cash, and they would have no ownership in Google, unless of course they used the money to buy some. The Google stock is not the same as cash because right now Google's stock is over valued compared to other companies. If you think in the future there will be someone willing to pay even more for it then yes it could be worth more than the cash, but only if you sell it