Kevin Rose has announced the pressure from savvy users is a greater threat than that of the financial powerhouses and their lawyers:

Occasionally we step in to remove stories that violate our terms of use (eg. linking to pornography, illegal downloads, racial hate sites, etc.). So today was a difficult day for us. We had to decide whether to remove stories containing a single code based on a cease and desist declaration. We had to make a call, and in our desire to avoid a scenario where Digg would be interrupted or shut down, we decided to comply and remove the stories with the code.

But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be.

If we lose, then what the hell, at least we died trying.

Interesting to note that the users can take his site down immediately through distributed denial of service that would be hard, if not impossible, to prevent or even trace. However, the courts are far less efficient and might take months or years to force him off-line. But it also sounds good to say that he will take a stand to support dynamic community content against the ancient media moguls.

Edited to add (2 March 2007): Google and YouTube seem to be taking a similar stand, as the Guardian reported today.

In a filing with Manhattan’s district court, YouTube said: “By seeking to make carriers and hosting providers liable for internet communications, Viacom’s complaint threatens the way hundreds of millions of people legitimately exchange information, news, entertainment, and political and artistic expression.”

I’m guessing the Viacoms of the world take issue with the terms “legitimately exchange” because it poses a direct threat to their entire operations model. They want to control eyeballs and ears. Once upon a time this was more plausable because only giant companies could afford mass distribution and exchange of information, spreading the cost out accross all their consumers. Back then few individuals could afford the overhead of “discovering” talent, maintaining manufacturing and warehousing systems, or keeping an army of lawyers employed to fight against the competition. Today, however, consumers benefit from dynamic ranking/rating systems and virtually free distribution channels that requires minimal overhead. The only thing that really remains is the giant company single-contact relationship with advertisers. So the big (billion dollar) question is: what will regulators decide really constitutes a legitimate exchange of information?

Incidentally, I can’t pass up the chance to throw in the news that even the UN is facing a lawsuit related to this topic. A group of Congolese polio victims claim they were not fairly compensated for a song played on radio and TV:

Let’s Go and Vote was played repeatedly in the run-up to last year’s historic polls on radio and TV stations.

In a country where a third of the population is illiterate and with crumbling infrastructure, the song is credited with boosting turn-out to 70%.

But the eight members of the Staff Benda Bilili band were paid $50 each.

The UN has denied any responsibility for paying royalties.

[…]

“It is thanks to our song that people went and voted but Monuc [UN Mission in DR Congo] did not pay us and we are still forced to sleep and beg in the streets. This is slavery,” said band leader Nzale Makembo.

I searched but couldn’t find a copy of their video on YouTube.