Greg Sandoval
YouTube will be allowed to mask important user information from records it must turn over to Viacom, Google said in a blog post on Monday.
"Viacom and the other litigants have backed off their demand for YouTube user viewing histories," Google said in a statement. "We have reached agreement to anonymise the data."
A Viacom spokesman declined to comment.
The move comes after a federal court earlier this month ordered Google's YouTube to hand over usernames, IP addresses and viewing histories to Viacom, parent company of Comedy Central and MTV. This ignited a controversy over Internet privacy and put Viacom on the defensive.
Last year, Viacom accused Google's YouTube of violating its copyright in a $1bn (£500m) lawsuit. Following the court's order, Viacom was widely criticised for intruding on people's online privacy even though the company had said it never asked to receive personally identifying information.
To this point, the agreement appears to make everyone a winner: Viacom will look like a responsible Internet citizen, Google will no doubt be credited for standing up for Internet rights and most importantly, and YouTube users don't have to worry about their privacy.
But this is certainly not the end of this case. Last weekend, two sources with knowledge of the negotiations between the companies told CNET.co.uk's sister site News that Google was refusing to hand over to Viacom information about what videos YouTube employees have watched or uploaded to the site.
The sources said that the information could help Viacom prove that YouTube has turned a blind eye to the piracy on its site. Google is also likely to ask to see similar records about Viacom's employees. That might show that while Viacom's lawyers were demanding YouTube to remove its videos, Viacom's marketing managers may have been among those that posted them.
The case is not scheduled to go to court until next year at the earliest.
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