Premier League: Google, YouTube Are an IP 'Protection' Racket

In the latest intellectual property rights holders' legal attack on YouTube, and perhaps using the most blistering language to date, England's predominant football (soccer) league has launched a class-action lawsuit against Google and its YouTube division. In its complaint, the Premier League literally accuses the newly merged companies of forming an organized "protection" racket, whose methods are to deceive Congress while extorting low license fees from selected partners in exchange for IP protection.

"In a Twenty-First Century embodiment of an age-old scheme," the League's attorneys write for a filing in US District Court in New York last Friday, "Defendants have agreed to provide 'protection' against their own infringing conduct through a series of 'partnership' agreements with various copyright owners. Put another way, when the license fee sought by a copyright owner is low enough to be deemed satisfactory to Defendants, Defendants find themselves able to shed their blinders and employ technology to safeguard the rights of their new 'partners."'

Such partners include Warner Bros., though the complaint implies that if Google had intentions on partnering with everyone in the business -- for instance, with Viacom as well -- it would have already done so.

Earlier in the complaint, the League claims YouTube already knows how to exercise rights controls over the content it enables users to share, but deliberately chooses not to do so, for that would take away its key bargaining chip. Instead, the League alleges, YouTube and Google willfully contribute to the public's misconception of digital media as being something too complex and unwieldy for rights management measures to control.

Anyone wishing to challenge Google legally, the complaint goes on, must assume the burden of proof: specifically, to prove Google's alleged assertion that the Internet cannot be controlled, wrong.

"Defendants have feigned blindness and an inability to reduce the wholesale infringement that occurs, constantly and unremittingly, every day on the YouTube website," reads the complaint, "distorting the balance created by Congress and forcing the victims - the content producers themselves - to go through the meaningless exercise of pointing out to Defendants what Defendants plainly already know: that there is copyrighted material being exploited on the YouTube website without the authorization of the rights owners."

The complaint lists 17 major Premier League matches during last month whose content was recorded off-air. Premier League soccer is a huge draw, and either the most expensive or second most expensive sporting event for telecast produced anywhere in the world depending upon whom you ask, with American NFL football being the alternate.

In May 2006, a European Commission effort to prevent one British broadcaster, Sky Sport, from holding a monopoly on Premier League football resulted in a second bidder helping the League to raise its rates to astronomical levels. Together, Sky and Irish broadcaster Setanta paid GBP 1.7 billion ($3.1 billion under last year's exchange rates) for the rights to show a mere 138 matches starting this August.

That's not counting international rights and retransmission rights to other media -- for instance, cell phone and Internet -- for which broadcasters also pay handsomely. Estimates are that all these subsidiary rights collectively bring in 159% the revenue of national rights.

Although the Premier League complaint omits any suggestion of a formula for damages, it explicitly claims, "For the length of time each infringing video was or is posted on YouTube...Lead Plaintiffs' and the Class' rights of reproduction, distribution, public performance, public display, preparation of derivative works, and/or to transmit digitally over the Internet were violated."

The complaint also directly refers to the fact that Google and YouTube are advertiser-supported, and draws the parallel between YouTube's ability to show supported content without permission or license and the League's rights to license TV broadcasters to do so for a fee. It's this business which YouTube is working to circumvent, the complaint suggests; and it also refers to the $1.8 billion that Google spent in the acquisition of YouTube.

The Premier League is no stranger to allegations of monopolization. Though it is far from the only soccer league in the UK, its exclusive licensing relationship with Sky Sport was called into question last year, raising allegations that Sky -- owned by Rupert Murdoch, who owns Fox in the US -- was engaging in abuse of monopoly power. This led to the League assuring the presence of a second bidder in the latest round, while the EC finally concluded that while Sky was dominant, it was not abusing its dominant position.

So all the EC accomplished with that inquiry was skyrocketing rates even further, perhaps to the eventual detriment of YouTube.