Can You Be Sued Over What's in Your Digital Music Locker?

Dear Rich: Can a music service like Amazon's Cloud delete tunes that I upload? Cloud services or "music locker" services can (and are obligated) to delete infringing copies of music if requested to do so by a copyright owner. At least that's the position taken recently by the district court in Capitol Records v. MP3Tunes LLC.
Backstory. MP3Tunes offered a cloud based service in which people could purchase songs and place them in their digital music lockers, or they could upload songs they owned, or they could search for versions of the songs they owned online (including unauthorized versions).
MP3Tunes received DMCA notices from record labels and removed user links to the infringing songs but the company failed to delete the infringing copies from the user's music locker.
Here comes da' judge. The district court ruled against MP3Tunes for failing to remove the infringing content from user's music lockers, although that ruling was considered a "hollow victory" for the labels because the judge refused to grant the label's request to remove "MP3Tunes' safe harbor exemption. As long as MP3Tunes removed links to infringing material and deleted infringing content as requested by the copyright owner, the company could take advantage of the DMCA's so-called safe harbor.
Rock Me Amadeus. We hope you're not downloading unauthorized Falco recordings. We got in a nostalgic mood the other day and Spotified some great Falco tunes. Funny thing, Falco doesn't sound nostalgic at all. So sad he's gone. (And don't forget one of our favorite-ist Falco lyrics.)