It happened relatively quickly and relatively silently, however it did happen, January 19th saw Megaupload, which accounts for four per cent of all internet traffic, struck off the internet map as federal prosecutors had the site shut-down in response to an indictment of criminal charges.
The charges focused on several key points, based primarily on the firm's business model to attempt to separate it from standard file-locker websites. We've taken a summary from Wikipedia, as the list is rather extensive:
- In practice, the "vast majority" of users do not have any significant long term private storage capability. Continued storage is dependent upon regular downloads of the file occurring. Files not downloaded are rapidly removed in most cases, whereas popular downloaded files are retained.
- Because a small proportion of users pay for storage, the business is dependent upon advertising. Adverts are primarily viewed when files are downloaded and the business model is therefore not based upon storage but upon maximizing downloads.
- Persons indicted have "instructed individual users how to locate links to infringing content on the Mega Sites ... [and] ... have also shared with each other comments from Mega Site users demonstrating that they have used or are attempting to use the Mega Sites to get infringing copies of copyrighted content."
- Persons indicted, unlike the public, are not reliant upon links to stored files, but can search the internal database directly. It is claimed they have "searched the internal database for their associates and themselves so that they may directly access copyright-infringing content".
- A comprehensive takedown method is in use to identify child pornography, but not deployed to remove infringing content. (item 24)
- Infringing users did not have their accounts terminated, and the defendants "made no significant effort to identify users who were using the Mega Sites or services to infringe copyrights, to prevent the uploading of infringing copies of copyrighted materials, or to identify infringing copies of copyrighted works" (item 55-56)
- An incentivizing program was adopted encouraging the upload of "popular" files in return for payments to successful uploaders. (item 69e et al)
- Defendants explicitly discussed evasion and infringement issues (69i-l)
Whilst we have no doubt that illegal content was rife on Megaupload, as with most 'normal' file-locker websites, the accusations attempt to underplay legitimate usage, estimate monetary values with little backing along with the number of premium users that would be affected, with attempts to interpret the firm's business plan as mechanisms designed to promote copyright infringement, all whilst referring to the matter as the 'Mega Conspiracy'.
It was heard, that though Megaupload is a world-wide firm, based in Hong Kong; as it leased servers in Ashburn, Virginia, this gave federal authorities jurisdiction to act upon the indictment. The event which shocked the Electronic Frontier Foundation, however, was the arrest of Megaupload owner, Kim Dotcom and three other employees yesterday, as the arrest was made outside of US territory in New Zealand and despite Kim's German nationality. Mind you, Kim Dotcom, previously known as Kim Schmitz, certainly has a coloured past when it comes to the law, having previously been convicted of computer fraud and handling stolen goods, amongst other charges and accusations.
Irrespective of how this case turns out, many website have been quick to point out that the excessive authority employed by the US in handling what, at this stage, is an official accusation, is a stark reminder of why bills such as SOPA and PIPA must remain outside of the legal system.