Viacom Sues Google, YouTube for $1B


Viacom filed a lawsuit against YouTube and Google -- seeking more than $1 billion in damages -- for what it called “massive intentional copyright infringement of Viacom's entertainment properties.”

The media company -- which is also seeking an injunction barring the video-sharing site from continuing to host Viacom content -- alleged that almost 160,000 clips of Viacom's programming have been available on YouTube without permission, and that these clips had been viewed more than 1.5 billion times.

Viacom filed the suit Tuesday in U.S. District Court for the Southern District of New York.

Google had prepared for just such a lawsuit: When it closed its $1.65 billion deal for YouTube last November, Google said 12.5% of the equity in the transaction will be "subject to escrow for one year to secure certain indemnification obligations."

Before taking the Web giant to court, Viacom demanded last month that YouTube pull down what it estimated were at least 100,000 video clips of its content. YouTube at the time said it would comply with the request.

In a statement, Viacom said: "YouTube is a significant, for-profit organization that has built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent, Google. Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws. In fact, YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden -- and high cost -- of monitoring YouTube onto the victims of its infringement.”

Viacom’s statement continued: “This behavior stands in stark contrast to the actions of other significant distributors, who have recognized the fair value of entertainment content and have concluded agreements to make content legally available to their customers around the world … After a great deal of unproductive negotiation and remedial efforts by ourselves and other copyright holders, YouTube continues in its unlawful business model. Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused.”

"We have not received the lawsuit but are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree,” Google said in a prepared statement.

“YouTube is great for users and offers real opportunities to rights holders: the opportunity to interact with users; to promote their content to a young and growing audience; and to tap into the online-advertising market,” Google added. “We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube and its ability to attract more users and more traffic and to build a stronger community."

Last week at an investment conference, Viacom CEO Philippe Dauman said the company's decision to pull those 100,000 video clips from YouTube allowed it to make more money on that content.