It absolutely can be used as cruel and dangerous tool to harm the competition.
The DMCA does state:
Quote:
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ANY PERSON WHO KNOWINGLY MATERIALLY MISREPRESENTS THAT MATERIAL OR ACTIVITY IS INFRINGING, OR THAT MATERIAL OR ACTIVITY WAS REMOVED OR DISABLED BY MISTAKE OR MISIDENTIFICATION, SHALL BE LIABLE FOR ANY DAMAGES, INCLUDING COSTS AND ATTORNEYS’ FEES, INCURRED BY THE ALLEGED INFRINGER, BY ANY COPYRIGHT OWNER OR COPYRIGHT OWNER’S AUTHORIZED LICENSEE, OR BY A SERVICE PROVIDER, WHO IS INJURED BY SUCH MISREPRESENTATION, AS THE RESULT OF THE SERVICE PROVIDER RELYING UPON SUCH MISREPRESENTATION IN REMOVING OR DISABLING ACCESS TO THE MATERIAL OR ACTIVITY CLAIMED TO BE INFRINGING, OR IN REPLACING THE REMOVED MATERIAL OR CEASING TO DISABLE ACCESS TO IT.
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Nevertheless, it's difficult and expensive to bring such a case forward, not to mention winning it
Fortunately, we've had pretty good success since our
DMCA procedures went into place. By this I mean, the complaints have actually gone WAY DOWN since we started requiring formal notices

I can only hope it stays that way.
Deb
http://www.FutureQuest.net/Services/TOS/DMCA/#FAQ
http://www.FutureQuest.net/Services/TOS/DMCA/#Note