GoPC - But what about the argument that Google knowingly profited by placing advertisements on what they obviously knew was copyrighted content?
That's not the argument that Google will make... the "framework" of the website is consistant no matter WHAT the content is. The argument is that YouTube was built in good faith and the customers have chosen to break the TOS. The ad placement and structure of such was in place BEFORE the site was propogated with these violations...
therefore, at best, Google/YouTube may be instructred to take more proactive and reactive actions against TOS violators.
In your gym example, if you owned the Gym and rented it out for a legitimate flea market activity and the participants violated your trust, selling drugs on the premesis, even though you may have had information suggesting that they had done it before.... you're still only liable for corrective action. Because your Gym exists for the purpose of leasing out for events and participants are presented with a TOS that they either choose to violate or not.
If you chose to NOT take action, the authorities would step in a "encourage" you to take the needed action and only after repeated offense might they consider you "part and parcel" to the distribution and profit of the activity itself.
But that's a hard case to prove.
It is a bit different with tangible property with the ability to physically inspect product, vendors and traffic rather than a virtual space occupied by literally BILLIONS of individuals moving around within it.
I'm not saying it's RIGHT, I'm saying that it will most likely be their defense.
GoPC