Mygazines
There are a number of Internet businesses that have been based on copyright infringement. YouTube, LimeWire, Napster, BitTorrent, even Google and their cache of web pages was initially deemed infringement (and still is by some people).
The thing that lets these businesses survive is the DMCA, strangely enough. Thanks to the DMCA, I can let a user upload videos to my site and basically close my eyes to what gets uploaded. If someone uploads something that they don't have rights to, it's not my problem - it's up to the copyright owner to notice that it's there and send me a takedown notice. Until that happens, I can let users view that video.
Here's the text from the DMCA itself:
Under the knowledge standard, a service provider is eligible for the limitation
on liability only if it does not have actual knowledge of the infringement, is not aware
of facts or circumstances from which infringing activity is apparent, or upon gaining
such knowledge or awareness, responds expeditiously to take the material down or
block access to it.
This gives entrepreneurs the freedom to build companies based on copyright infringement, doesn't it? Nice thing about the Internet is that there are enough users out there willing to pirate material that if one of them uploads something and it gets taken down, there are 20 more people waiting to re-upload the same content.
This is what Mygazines seems to be depending on. Mygazines is a YouTube for Magazines. But unlike YouTube, there isn't even the pretense that the site exists for sharing legal material. It's a place to upload magazines for other users to view them for free, until they get pulled.
What will be the next ludicrous, obviously-illegal business to start using this same loophole? I'm guessing a commercial software sharing site that lets you upload ISO images of commercial software for other users to download. Or has someone done that yet?