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Viacom: Google Used Piracy for Profit

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UPDATED The latest volley has been filed in the copyright infringement suit between Viacom (s VIA) and Google (s GOOG): Just hours before Google faced analysts and investors on its first-quarter earnings call, Viacom released newly unsealed documents from the suit. The filings seek to strengthen Viacom’s argument that Google was aware of piracy at YouTube before the video share site was acquired, and that Google attempted to use piracy as a way to coerce content owners into striking licensing deals with it.

The newly released filings include internal company presentations by Google executives prior to the company’s acquisition of YouTube, as well as depositions by Google CEO Eric Schmidt and YouTube product manager David King. The presentations that were unsealed deal primarily with Google’s plans to compete with YouTube through its own Google Video portal, while the depositions deal primarily with YouTube’s use of fingerprinting technology to reduce the amount of copyrighted content that could be found on the site.

The filings point to numerous warnings that some Google executives gave to management about YouTube and the amount of pirated content that was available on the then-rival video site. “YouTube’s business model is completely sustained by pirated content” and “YouTube’s content is all free, and much of it is highly sought after pirated clips” are just two choice comments from the presentations that Viacom highlights in its statement on the matter. Despite those warnings, Google went forward with the acquisition, knowing that a large portion of YouTube’s content was pirated. The filings also point to efforts by Google to coerce video publishers to license their content to YouTube using the availability of fingerprinting technology as a carrot for getting content providers to sign up.

In a statement that was released alongside the filings, Viacom vice president and associate general counsel for Intellectual Property & Content Protection Stan Pierre-Louis wrote:

“Taken together, these exhibits make clear one of our core claims in the case: that Google made a deliberate, calculated business decision not only to profit from copyright infringement, but also to use the threat of copyright infringement to try to coerce rights owners like Viacom into licensing their content on Google’s terms.”

Viacom also used the opportunity to rebut Google’s claims that it is protected by the safe harbor provision of the Digital Millennium Copyright Act, which shields ISPs and file hosts from liability for content that is uploaded by its users so long as they take down that content when contacted by rights holders. “YouTube and Google made a calculated business decision to use other people’s copyrighted content as their start-up capital,” Pierre-Louise wrote.

The latest filings come after a back-and-forth between the companies that began last month, when both attempted to portray the other as the bad guy when the court filings were initially released. In that exchange, Viacom tried to show that Google and YouTube’s founders willfully ignored obvious copyright infringement. Meanwhile, Google accused Viacom of having its employees pose as normal users to upload promotional content to the video-sharing site.

Update: In response to Viacom’s release of these court documents, a YouTube spokesperson issued the following statement:

“It’s revealing that Viacom is trying to litigate this case in the press. These documents aren’t new. They are taken out of context and have nothing to do with this lawsuit.”

Related content on GigaOM Pro: Why Viacom’s Fight With YouTube Threatens Web Innovation (subscription required)