YouTube goes on the defensive, explains how UMG made Megaupload's video disappear

Rich Fiscus
19 Dec 2011 1:29

Just over a week ago a video created by file locker provider Megaupload was taken down from YouTube at the request of Universal Music (UMG). In the aftermath of that incident, YouTube finds itself answering questions about how that happened thanks to UMG's refusal to provide details.
Based on UMG's filings in response to the resulting lawsuit in which Megaupload sought to have them punished for improper use of the DMCA's takedown provision, one thing we know for sure is that no actual DMCA takedown request was issued.
Instead, UMG used YouTube's content management (ie digitial fingerprinting) system to have the content removed. That means Megaupload's primary claim is pretty much dead in the water.
We also know UMG says they never made a copyright claim on the video because of a letter they submitted to the court in which a company representative explained to YouTube that was not the only grounds under which their contract allows a takedown.
Beyond that, they have avoided addressing the issue of what happened, providing just enough information to show any DMCA related penalties (and really that's not much anyway) don't apply.
But unlike UMG, YouTube is concerned about the effect this debacle has had on their image. On Friday they went into damage control mode and attempted to explain what happened.
The company released a statement saying (via Wired):

Our partners do not have the right to take down videos from YT unless they own the rights to them or they are live performances controlled through exclusive agreements with their artists, which is why we reinstated it.

Because YouTube had already made the video available again, an injunction requested by Megaupload last week to have it reinstated and prevent UMG from continuing their action to block it was rejected by a federal judge. However, that doesn't mean the case is over.
The judge told Megaupload's lawyers they may file a new request for both an injunction and expedited discovery. Just because there was no DMCA action, it doesn't necessarily follow that UMG's gaming of YouTube's automated takedown system isn't actionable.
Since UMG's actions interfered with Megaupload's business activities by preventing them from promoting their service, in theory there may be grounds for tortious interference. While the likelihood of a damage award based on such a claim seems slim, it does at least open the door for an injunction, preventing UMG from doing it again.
As part of the process for determining whether UMG did, in fact, interfere with Megaupload's business, there would be discovery to find out exactly what happened. Not only would this shine a light on what exactly UMG did, but it could also lead to some details of UMG's contract with YouTube being revealed.
This, in turn, could result in significant heat on YouTube to explain what they are going to do to prevent similar abuses in the future. Not to mention the potential damage to UMG with artists who work on projects for other companies worrying their videos will disappear if UMG doesn't approve.