Google and Viacom (owner of MTV, BET, Paramount, and more) are fighting it out in court with Viacom contending that Google is no longer a "safe harbor" under the 1998 Digital Millennium Copyright Act and must do more to ferret out and remove copyrighted material -- like Viacom's. Viacom is supporting its case with some old emails supposedly proving that Google relaxed its copyright policies after its 2006 YouTube purchase and that it knew very well that YouTube was a pirate haven of illegal video goods. Let's not forget to mention the "sour grapes" component here: Viacom wanted to buy YouTube too and Google beat them out.

Whatever Google authorized in the past, in recent times they have added content ID tools to help companies identify and find pirated content on YouTube. They've done this to such a degree that they've fallen somewhat afoul of the Electronic Frontier Foundation.

One issue that has surfaced is Viacom "continuously and secretly" uploading its own stuff to YouTube (self-pirating?). (Viacom disputes this and claims it only happened a few times.) From the YouTube blog:

For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there. It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately "roughed up" the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko's to upload clips from computers that couldn't be traced to Viacom. And in an effort to promote its own shows, as a matter of company policy Viacom routinely left up clips from shows that had been uploaded to YouTube by ordinary users. Executives as high up as the president of Comedy Central and the head of MTV Networks felt "very strongly" that clips from shows like The Daily Show and The Colbert Report should remain on YouTube.