• by Wendy Davis , Staff Writer @wendyndavis, December 19, 2011

Record labels have made no secret of their distaste for cyberlockers like Megaupload which, the labels argue, contribute to piracy by making it easy for people to share music.

So Universal Music Group couldn't have been thrilled when a clip showing celebrities like Will.i.a,m, Sean Combs and Kim Kardashian endorsing Megaupload went live on YouTube earlier this month. 

Even so, it was surprising to learn that Universal demanded the clip's removal shortly after it appeared online. Visitors who tried to access the clip last week were told by YouTube that the Mega Song was removed due to an infringement claim -- despite the fact that the clip was commissioned and created by Megaupload and not Universal.

Universal said on Wednesday that it took action after learning of an “unauthorized use” of a performance. “This is an on-going dispute that surfaced several weeks ago with respect to the unauthorized use of a performance from one of our artists. We heard from a number of our other artists (and their representatives) who told us they’ve never consented to being portrayed in this video,” the company said in a statement.

But that statement only raised additional questions. If the gist of Universal's complaint was an alleged violation of celebrities' right of publicity -- that is, the right to control the commercial use of their names and likenesses -- as opposed to copyright infringement, why, then, would YouTube indicate to visitors that the clip was taken down because of a potential copyright issue?

For its part, Megaupload denied that it violated any laws and that all of the celebrities to appear in the clip signed releases.

Megaupload also filed suit against Universal on Wednesday, alleging that the record label had sent sham takedown notices in order to suppress the cyberlocker's promotional efforts. The file-hosting company sought a temporary restraining order banning Universal from issuing further takedown notices. 

Universal then provided the court with an unexpected response: The company made the startling claim that it's allowed to use YouTube's content management system to take down clips for reasons other than copyright infringement. UMG's papers included a letter sent by a company attorney to YouTube specifying that Universal's rights to use the content management system “are not limited to copyright infringement.” The letter went on to reference two paragraphs -- labeled 1(b) and 1(g) -- of a March 31, 2009 licensing agreement. That licensing agreement hasn't been made public.

This statement came as a surprise to virtually all observers, who hadn't previously known that Google allowed companies to take down clips for reasons besides copyright infrnigement. The revelations sparked questions from groups like Public Knowledge, which wanted to know whether YouTube gave Universal Music “a universal veto.”

Google put out a statement late Friday saying that its right to take down videos if “they own the rights to them or they are live performances controlled through exclusive agreements with their artists.”

YouTube also restored the clip and Universal said in court papers that it won't seek to take it down again. But the dust-up still  raises questions about Google's policies and why Universal seemed to believe that it had the right to remove this particular clip.

If Universal misused Google's takedown tool, Google should outline how it will try to prevent that from happening in the future -- assuming, that is, that Google wants companies to continue to rely on YouTube to distribute clips.