Betting the Internet: Google and Amazon

Occasional madisonian Randy Picker has some thoughts on Judge Chin’s rejection of the Google Book Search Settlement over at the University of Chicago Law School Faculty Blog.   

James Grimmelmann, who has been posting and curating careful analysis of the case since it began, and particularly since the Settlement (v. 1.0) was announced, has detailed comments here and here.

I was reminded this week that back when the lawsuit was filed against Google, I characterized Google’s initially aggressive defense as “bet the Internet” litigation.  In legal terms, the case could be framed much more narrowly, as I acknowledged in this later post, and as Randy argues in his post linked above.  Whether or not Google’s bet was a good one at the time — thoughtful people disagreed — today I’m with those who predict that Google likely will and should try to negotiate a new settlement.

But the “bet the Internet” possibility is still with us.  Amazon.com’s new “Cloud Drive” and “Cloud Player” service strike me as inviting a similar (though not doctrinally identical) kind of litigation, risk, and payoff.  If I understand the business model, Amazon.com wants to set up a music streaming service that is insulated from liability — in its view — by the safe harbors arguably available under Section 512 of the Copyright Act.  Liability risk would be offloaded to fair use defenses arguably available to consumers (for their uploading and storing copies of their own paid-for content) and to the idea that streamed “performance” of the music at a consumer’s request would be “private” because a consumer would “perform” the music to himself/herself (that is, lawful) rather than “public” (and therefore infringing).  It is more or less, I take it, iTunes in the cloud, but without those pesky licenses.

This is not quite bet-the-Internet, but it is close.  Is it a good bet?  Or a colossal bluff?