By Chris Castle

It’s no secret that the major labels are all renegotiating their licenses with YouTube.  It’s also no secret that Google’s “notice and shakedown” interpretation of the government’s DMCA safe harbors hands Google (which owns YouTube) a lot of leverage to the great disadvantage of artists, songwriters, record companies and music publishers.

How does the highly litigious Google create first and second order negative harms (or “externalities”) as a result of the government’s irresponsible refusal to fix this 20 year old law?  There’s direct piracy issues as many artists including Mara Schneider and David Lowery have pointed out in no uncertain terms.

But given the rise of streaming–which no one was thinking of during the drafting or passing of the DMCA safe harbor–the low royalties and head-in-the-sand intentional blindness from Google on search and YouTube on video search constricts the free cash flow necessary for labels to invest in artist development.

Google’s response?  They trot out the “YouTube stars” who seem to be doing well on YouTube to the great profit of YouTube and to a much lesser extent the particular creator.  In other words, if you’re part of the Google infrastructure on YouTube, you seem to be doing very well.

This biasing of its own products ahead of others in search results is exactly the kind of monopoly abuse that Google is being prosecuted for in Europe where Google faces a history-making fine of €3 billion ($3.4 billion).  But given the access that Google lobbyist Johanna Shelton has to the White House, do you really think that the Federal Trade Commission is going to reopen its investigation into Google?

Even though Google has an unprecedented degree of control over the U.S. government, there is a possibility that the FTC may be reopening its investigation.  According to Politico:

When the FTC ended its earlier Google probe, critics said the agency — which secured a handful of concessions from Google on patents and some business practices — had essentially delivered a slap on the wrist to the search giant, which has a heavy lobbying presence in Washington. Since then, the European Commission has charged Google with anti-competitive behavior for allegedly manipulating search results to favor its own shopping services and and using its Android mobile operating system to secure better placement of its apps with smartphone makers.

If the FTC is going to reopen that investigation, then it would be entirely appropriate to investigate why video producers who have signed up to YouTube’s program seem to be making so much more money than artists who haven’t.

But it’s going to be a heavy lift.