You misunderstand the “Fair Use” part of the law. It’s not that YouTube doesn’t care, it can’t care. Any attempt to edit what users post before they post it makes YouTube liable for content since they are no longer a common carrier, but a publisher and editor.
If YouTube caught 99% of the copyright infringement, but the last 1% slipped through, YouTube and Google would be directly liable for copy right infringement – even though they are taking steps to stop it, and stopped almost all of it. If you’re playing publisher, you’ve become responsible for everything you publish.
By simply being a common carrier, YouTube can avoid the headaches associated with filtering content.
The problem is that the Fair Use provision didn’t anticipate a YouTube. The fair use provision imagined a CompuServe and its forums. If someone on some forum published copyrighted material, CompuServe couldn’t be held liable.
YouTube, however, isn’t just some forum. All the CompuServe forums put together may have had 100,000 active posters (if that many) spread across thousands of forums. CompuServe forums were also pretty much text based, so the copyright infringement was someone posting copyrighted works. YouTube is one big forum with hundreds of millions of users. It includes media like songs and video and all users are pretty much on a single “forum”, so all have access to that content. And, the content is much more attractive to users. If someone published a copy righted story on CompuServe, maybe 100 people might read it. Post yesterday’s Daily Show, and you’ll have 100 million downloads.
I don’t know what the “solution” would be. YouTube cannot act as editor without actually incurring legal obligations. At the same time, it is unfair for Viacom and others to spend hundreds of thousands of dollars each day scouring YouTube for copyrighted material and requesting that it get taken down.
Of course, you could argue that Viacom has to spend hundreds of thousands of dollars anyway scouring the entire Internet for copy right infringement, and maybe YouTube actually makes their job easier because it is your one stop copyright infringement place. A simple query on YouTube will bring up all of your copyright infringed material. No more surfing from website to website looking for copyright infringed stuff.