Arstechnica

File-sharing service RapidShare has been dealt a blow by a German court and faces severe penalties if it fails to take appropriate measures against the uploading of copyrighted content by its users. The Düsseldorf Regional Court ruled against RapidShare last week in a case brought on by the German version of the RIAA, GEMA. GEMA hailed the decision as a huge victory, and concluded that RapidShare could face shutdown if it’s unable to comply.

Had this involved a US court, the outcome would have been different. In the US, web site operators can
(and do)
argue that the Safe Harbor provision in the DMCA protects them from
liability as long as they remove infringing content after being
presented with a takedown notice. In Germany (and many other
countries), there is no equivalent to protect sites like RapidShare,
meaning that RapidShare almost has little but to comply with the
ruling. According to GEMA, the court said that RapidShare must “take
such measures as involve the risk of its business model becoming much
less attractive or even having to be discontinued entirely.”