When it comes to privacy issues, even the most ardent rivals are able to reach a settlement, as we saw in the Viacom vs. YouTube copyright infringement case. The protests of thousands of YouTube users, as well as the wide media disapproval got the two parts to sit down and talk about the possible remedies to the situation.

In early July, a federal judge ruled in favor of Viacom, granting it access to YouTube user records in order to prove their case against Google and YouTube. The records contain usernames, IP addresses and viewing history, but the judge dismissed Google’s claims that turning them over would break user privacy.

Nevertheless, not only users, but also newspapers and privacy advocates said a big NO to handling over user records, despite Viacom’s promises not to seek or use any personal identifiable information to prove their case.

This whole situation started off in March 2007, when Viacom and associates filed a lawsuit against YouTube, and its owner Google, for “massive intentional” copyright infringement of Viacom’s entertainment properties. Furthermore, in a lawsuit re-filed one year later, Viacom accuses Google of deliberately supporting copyright infringement and not putting enough resources into finding ways of stopping it.

The $1 billion lawsuit went beyond court’s limits the moment the risk of compromising the privacy of millions of YouTube users became real. Many feared the situation could have lead to another AOL fiasco (two years ago, The New York Times correctly identified an AOL user), proving that privacy concerns were well-founded.

Following the judge’s ruling in the Viacom-YouTube case, the Electronic Frontier Foundation drew attention to the fact that the order violated the Video Privacy Protection Act and the First Amendment right of YouTube users to receive information anonymously.

The good news is that Viacom, MTV and other litigants “backed off their original demands,” as Google said in its blog, by agreeing to the anonymization of user logs in order to protect the privacy of YouTube users.

Viacom claims it needs the YouTube records in order to prove the piracy accusations, which lead to the lawsuit in the first place. However, Viacom also said it has no interest in identifying users, and that the information they will receive from Google will be used exclusively for proving their case.