Editor's note: Google has responded to this post, saying:
We take down videos when a content owner informs us that the video infringes their copyright. If the content owner is using our automated Content ID system, when uploads that match the content owner's content are detected, YouTube acts upon the videos as to the content owner's own policy — either monetizing, tracking, or blocking.
The Derivative Work Concern Group in Hong Kong recently issued a statement condemning YouTube for the deletion of an authorized derivative song for commemorating the victims of recent ship crash.
[Update: an initial response from Google explains the procedure of the take down process: once they scan the song, they would ask the copyrights holder, in this case UMG how to deal with the case. The copyrights holder has three options: 1. leave the video as it is; 2. put ads on it and generate venue for UMG; 3. infringement take down. As for the argument of fair use, the dispute is between the copyrights owner and the derivative work composer. YouTube cannot be the court in deciding the content because of the web neutrality principle. Yet UMG have issued a public statement  [zh] saying that YouTube hasn't consulted them about the take-down.]
The song, Hong Kong with Love,《大愛香港》, was a derivative work of an original song, with lyrics composed and music directed by Adrian Chow. With authorization from Chow, the famous derivative song writer, San Kala (山卡啦）composed the new song which was sung by G Major （G大調）. However the song was taken down soon after uploaded onto YouTube.
The song was uploaded by G Major. According to G Major the warning letter issued by YouTube was written in threatening tone. It says [zh]: “If we receive another infringement notice, we will delete your account and all the videos that you've uploaded…. Please delete all the videos that you don't have all-rights-reserved and please don't upload any video that infringe others’ copyrights”.
The concern group's statement on October 8 states that such warning has deprived G Major, San Kala and other derivative work creators’ rights to expression.
The concern group has cross-checked with Universal Musical Group (UMG), the company copyrights holder on the matter. The company claimed that they did not issue any complaint letter to YouTube and explained that the take-down was done by YouTube's automatic detection.
In the warning letter, YouTube said the take-down practice was according to U.S. copyright law. If this is true, claims the concern group, derivative work should be under the protection of fair use and the first amendment of the U.S Constitution.
The concern group demands YouTube:
1. To restore the video “Hong Kong, with Love”.
2. To correct YouTube's previous statement that San Kala and G Major have infringed the rights of original copyrights holder.
3. To apologize to San Kala and G Major.
4. Instead of using the auto-detection and delete the works without asking if authorization has been granted or if the work is a fair use case, YouTube should end the assumption of a derivative work as guilty of copyright infringement.
5. Explain to the public how is the decision of the take down of “Hong Kong, with Love’ is made.
Concern Group's statement in Chinese