They had been facing lawsuits and legal scrutiny since 2007; the only parties that ever won were the legal departments. Until relatively recently, YouTube wasn’t even profitable, and Content ID itself was, according to Google, over $100 million of investment to develop over the years. Given the scale of YouTube, I actually think it’s fair to take this at face value.

Ultimately I am not a lawyer and I can’t analyze how and why the case ended the way it did. However, I do think it is obvious to anyone that Content ID is a key component of how YouTube managed to escape further lawsuits and legal scrutiny. And as can be seen in the Oracle case, fighting something all the way into legal precedence can backfire in enormously painful ways, like having APIs all be eligible for copyright.