There are two major components to DMCA safe-harbor compliance. The first is that you honor takedown requests; unfortunately for software entrepreneurs, this seems to be the only DMCA component that is widely understood. The second major component is that you not operate your service with direct knowledge of infringement. A simple way to illustrate this is that if you have a screenshot of your application being used t…
I doubt it's illegal to embed a track that's been uploaded by the copyright owner, as they can just disable embedding. I'm assuming it becomes illegal if the uploader didn't own the copyright and was uploading the track illegally. This is impossible to verify unless the owner of the copyright gives a notice, YouTube does all it can, if they can't catch this then how can a normal user do so.
I'm not asking "is it mathematically possible?" I'm asking "do you really think Madonna, or Madonna's agent, uploaded that video?"
The court system very rarely works on the concept of "well, it could have been legit." If you buy a bunch of speakers 90% off out of the back of a van in an alley with their serial numbers scratched off, "well, it could have been legit" will not fly very far.