Over the past week, a weird little tale has been unfolding between Universal Music Group (UMG) and Megaupload, a popular digital file locker. The basic gist of it is that Megaupload published a promotional music video — which UMG took exception to, because some of the artists in the video were signed to UMG. Through some kind of digital hokus pokus, UMG had YouTube take down the video — and nonplussed, Megaupload re-uploaded the video (embedded below) and then sued UMG to prevent them from further interference.

Here’s where things get messy: Everyone assumed that Universal had used some arcane clause of the maligned Digital Millennium Copyright Act (DMCA) to take down the video — but that wasn’t the case. Shockingly, it has been uncovered that an existing agreement between YouTube and UMG allows UMG to remove any video, irrespective of whether copyright or some other conflict of interest is present. Universal simply logged into its YouTube control panel and removed Megaupload’s video — no questions asked, no due process. Better yet, it seems like YouTube’s own legal team isn’t aware of the overarching powers that have been granted to UMG. Here’s a snippet from UMG’s letter to YouTube [PDF]:

… As you know, UMG’s rights in this regard are not limited to copyright infringement, as set forth more completely in the March 31, 2009 Video License Agreement for UGC Video Service Providers, including without limitation Paragraphs 1(b) and 1(g) thereof.

It seems this agreement stems back to when Google collaborated with a bunch of music publishers to launch the Vevo music video site — but why UMG’s powers extend beyond the Vevo subsection of YouTube is beyond us. Furthermore, what kind of severe ocular degeneration must YouTube’s lawyers be suffering to grant UMG such sovereignty over content that it doesn’t own? YouTube/Google was either in the mother of all rushes to get Vevo off the ground, or perhaps UMG has some dirt on Google — who knows.

Unfortunately, these underhanded, behind-closed-door deals are very common throughout the industry — but because they’re private, commercial deals, you simply don’t hear about them until they bubble to the surface like a gloopy fart in a swamp. But them’s the breaks: when you agree to use someone else’s service — Facebook, Twitter, YouTube — you agree to abide by their rules. They don’t have to tell you about all of their third-party agreements, unless it directly involves personally identifiable data — and anyway, for the most part we don’t stop to question the rules and regulations that govern a free service, anyway.

I want to say that this is a problem with a hyperprivatized world where almost every service we use is privately owned and operated, where privilege (literally, private law) and backhanders rule supreme — but Thor knows that governments are founded on cronyism, too. Really, if anything, this UMG-YouTube deal simply shines a light on one of the dirtier, endemic aspects of society — and now that you know about it, maybe you’ll begin to spot similar situations elsewhere, too.

Of course, this also comes at a time when the Stop Online Piracy Act (SOPA) is on the cusp of being railroaded through Congress, too. In light of Universal’s baboonesque behavior, is it really wise to give copyright holders even more power when it comes to moderating and censoring the internet?