[tyree731]

I am not a lawyer, but this doesn't seem quite "free". Note that they aren't indemnifying customers for any consequences of said legal claims, meaning that customers would seem to bare the full brunt of those consequences should there be a credible copyright infringement claim.

[Joeri]

But it does guarantee that any customer that can’t afford a big legal team uses their big legal team, reducing the chances of a bad (for them) precedent caused by an inept defense.

It also discourages predatory lawsuits against small users of their API by copyright trolls, which would likely end up settled out of court and not give them the precedent they want.