Google Legal Woes Partly about Market Power

Viacom is doing a bunch of saber rattling over unauthorized videos on YouTube. Here’s more from Reuters and Search Engine Watch. From the Viacom “official statement”:

After months of ongoing discussions with YouTube and Google, it has become clear that YouTube is unwilling to come to a fair market agreement that would make Viacom content available to YouTube users. Filtering tools promised repeatedly by YouTube and Google have not been put in place, and they continue to host and stream vast amounts of unauthorized video. YouTube and Google retain all of the revenue generated from this practice, without extending fair compensation to the people who have expended all of the effort and cost to create it. The recent addition of YouTube-served content to Google Video Search simply compounds this issue. Virtually every other distributor has acknowledged the fair value of entertainment content and has taken deliberate steps to concluding agreements with content providers.

I go back to Eric Schmidt’s remarks at the August SES show regarding legal action being “a business negotiation being conducted in the courts.” The same could be said of this threat. Note: “months of ongoing discussions” have not produced “a fair market agreement” from Viacom’s point of view. Viacom doesn’t like the money/terms Google is offering.

I strongly suspect they will come to terms, however.

I can imagine Viacom Chairman Sumner Redstone reading the Google Q4 results and slamming his fist on the table. He and others see Google being enriched at the expense of traditional content publishers. And he wants more money for his content — God Damnit!

This is obviously an old complaint but Google’s global brand power, revenues and market position are now causing some to act in a) aggressive, b) shrewd or c) desperate ways to try and protect their businesses.

For example, in Belgium it’s quite likely after a preliminary negative ruling that Google will lose a copyright suit brought by Belgian newspapers. A ruling against Google could have EU-wide implications because of relatively consistent copyright laws and force Google into a negotiation to license content from newspapers. If that were to happen it would set an unhappy precedent for Google.

(Fair use and existing legal precedent in the US makes it unlikely to happen here.)

While everyone is theoretically vindicating their legal rights vs. Google, if Google (or YouTube) weren’t as powerful as they are today there wouldn’t be all the fuss — IMHO.

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Here’s more from ResourceShelf and the WSJ (sub req’d).