The Digital Millennium Copyright Act (DMCA) was enacted in 1998 as a response to the growing internet. It's designed to update copyright laws and protections for the internet and to criminalize circumvention of copyright laws. DMCA amends US copyright law to comply with the World Intellectual Property Organization (WIPO) Copyright Treaty and Performances and Programs Treaty among others. The most relevant part of DMCA for this project is Section 512:
Provides protection for online service providers
Has the effect of enabling copyright owners to have infringing content removed without need for litigation
Section 512 states that social media sites, internet service providers and other content hosts are not responsible for material that violates copyright that is uploaded using their services as long as they meet the requirements provided in Section 512. It creates a safe harbor, a provision in law that protects from liability as long as certain conditions are met. The conditions most relevant to YouTube are:
The entity qualifies as an online service provider
The entity has a termination policy in place to remove repeat copyright infringement offenders
The entity must not have knowledge of the infringing activity
The entity must not receive a direct financial benefit attributable to infringing activity
YouTube’s policies and practices demonstrate its efforts to meet these conditions and qualify for the 512 safe harbor. YouTube is an online service provider, so it meets the first condition. YouTube’s copyright strike and channel termination policy and its Content ID system are designed to help YouTube meet the second and third conditions.
YouTube’s policies have two general parts: a proactive and reactive part. Content ID is proactive, it is an automatic process that scans uploaded content for anything that violates copyright based on YouTube’s database of copyrighted material. Takedowns are a reactive measure and are in response to a copyright holder filing a request for offending content to be removed.
YouTube’s policies allow companies to more easily remove content that violates their copyright(s). YouTube handles a massive amount of user-submitted content - hundreds of hours of videos are uploaded every minute. The DMCA safe harbor allows YouTube to host all of those videos without having to pre-check each video as long as YouTube meets the 512 conditions and removes offending content when it becomes aware of it. The Section 512 safe harbor is the backbone of internet freedom, as without it, very few companies would be willing to take the risk to host content and the internet as we know it today likely would not exist.
When there is content that violates copyright, removing it is not the only option companies can take. There are various types of content online and on YouTube that copyright holders allow to remain up for various reasons. An example of this would be ‘let’s plays,’ a type of video where content creators simply upload footage of them playing through a video game.
According to YouTube these types of videos can be considered copyright violations (see a YouTube statement on video game use here), and companies have had them taken down. For example, Nintendo has taken down ‘let’s plays’ of their games on the grounds it violates copyright and YouTube compiled and removed the videos. Other video game companies however, allow and even encourage ‘let’s plays’ and leave them up for the advertising benefit and publicity. YouTube also has various options other than just removing offending videos. The videos can be removed and blocked completely, they can be tracked so statistics normally only viewable to the creator are visible to the copyright holder or they can claim monetization. Claiming monetization involves the copyright holder taking all or a portion of ad revenue generated by the video, this amount can vary from case to case. Finally, the copyright holder can do nothing and leave the video up as is, and this is what many companies do with ‘let’s plays.’
Further reading:
https://www.copyright.gov/dmca/
https://en.wikipedia.org/wiki/Digital_Millennium_Copyright_Act