Facebook resisted a few days longer than MySpace but finally has given in to the RIAA’s demands that the Project Playlist app be removed for copyright violation.
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The only surprise here is that it took Facebook this long to face up to reality: There was next to no upside for Mark Zuckerberg and company in fighting the big music labels, three of whom are suing Project Playlist. But there was plenty of downside: At best, the social network would end up squaring off against potential partners; at worst, it’s conceivable that it could end up being sued by the labels as well.
There is little or no litigation or legislation to support the proposition that Project Playlist is infringing. There isn’t enough established law of of any kind to protect Facebook from burning an unbounded amount of money in court, but that only applies if the majors decide to go to the mat with Facebook, and I can’t see why they’d make their stand in such a weak place.
What are Facebook’s alternatives? One alternative to Project Playlist is to have music on-site by cutting licensing deals in direct negotiation. Another option is to wait for a stronger proxy than Project Playlist, like YouTube, before standing pat. The other is to have only music which is explicitly permissively licensed, and uses a license that permits a commercial site.
My guess is the first.