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In June, a U.S. judge tossed the $1 billion copyright infringement case brought by Viacom in 2007. Viacom appealed in August.

Aaron Ferstman, YouTube's head of communications for Europe, the Middle East, and Africa, hailed the Spanish court's ruling as an affirmation of European law, which says that online service providers have a responsibly to remove unauthorized content but not to determine whether the content is authorized.

"This decision demonstrates the wisdom of European laws," wrote Ferstman in a blog post. "More than 24 hours of video are loaded onto YouTube every minute. If Internet sites had to screen all videos, photos and text before allowing them on a Web site, many popular sites -- not just YouTube, but Facebook, Twitter, MySpace and others -- would grind to a halt."

The law that immunizes online service providers from liability in the U.S. is called the Digital Millennium Copyright Act, which provides Safe Harbor protection to ISPs that act in good faith and respond to lawful takedown requests.

Viacom in its appeal is arguing YouTube failed to do enough to meet its obligations and should therefore not receive DMCA Safe Harbor protection.

While copyright infringement on YouTube remains an issue, it's far less so now than it was when the site first launched. YouTube has developed a system called Content ID that identifies unauthorized content use in cases where the content owner has provided YouTube with copies of content files for comparison. The system provides rights-holders with the option to block unauthorized use of their content, but it also offers the option to monetize it by placing ads in claimed videos or to simply be notified of unauthorized use.

Google says that over 1,000 media companies are using Content ID.

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