The Digital Millennium Copyright Act, enacted in 1998, helps protects a lot of online companies from legal suits for content not produced with their permission. For example, if you were to upload a protected video to YouTube, such as an episode of The Daily Show, Google is not liable for any loss claims from Viacom, assuming they comply with any takedown notices from Viacom on the affected content. Instead, the user who uploaded the content is liable, assuming the person can be identified, and Viacom is interested in pursuing.
Now, clearly, a lot of large content creators do not like this law. For example, Viacom has never been happy about Google's protection for YouTube under the law, filing more than a billion dollar suit and causing Google to implement content filtering to help prevent further legal action. Because of this, companies have tried to undermine the law through court cases, one of the most important being between UMG Recordings and Veoh, a video site, filed in 2007.
Over the past 6 years, the courts have been listening to and considering the arguments in the case. This past Thursday, a ruling was handed down by the United States Court of Appeals for the Ninth Circuit, and it was a massive victory for Veoh, with an almost entire dismissal of all of UMG's key arguments. UMG's argument was that, by having a music section on their site, they encouraged the illegal uploading of copyrighted music. The court disagreed, saying,
Merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one's services could be used to share infringing material, is insufficient to meet the actual knowledge requirement under §512(c)(1)(A)(i).
This is not just a win for Veoh, but a win for the entire Internet. Let me explain. We are probably all familiar with SoundCloud, a service designed to allow artists to upload their own music to share to their fans. Of course, the ability to upload audio files opens up the ability to upload copyrighted music. If this ruling had gone the other way, SoundCloud's entire business model becomes illegal, despite the fact that the company is entirely legitimate and encourages their users to be legitimate as well. Sites like YouTube, Video and even Facebook and Twitter would also immediately become infringing because they give the ability to upload videos, which could allow for illegal uploads.
Clearly, the entire Internet as it stands today would be at risk. Social engagement is the lifeblood of the Web, and spells success or failure for new tech products. One of the biggest announcements of the week surrounded Google shutting down a social engagement product, and it could turn into a Netflix-level PR disaster. If that doesn't show the power of social engagement, I don't know what does. Social engagement is surrounded in a world of image, video and audio sharing, all at risk if this ruling had gone the other way.