American laws and economists may favor YouTube in the United States, but overseas the copyfight is not going well for Google. On Monday, major Indian content owner Super Cassettes Industries won a restraining order against YouTube, forcing it to remove all of SCI's infringing content immediately. SCI also seeks a permanent injunction and damages, according to reports. It's likely they'll get it.
In the U.S., laws prevent Internet service providers from being held liable for their customers' actions. You can't sue Six Apart for a defamatory remark written on one of its TypePad blogs, and you can't sue YouTube for a video clip uploaded by a user. (Or so the legal theory goes, for now.) But in India, there are no such laws. In fact, India's Information Technology Act of 2000 explicitly makes services such website hosting companies, search engines, email services, and social networks liable for their users' content. There's no word yet on whether Viacom plans to move its headquarters to Mumbai.