The U.S. Justice Department shut down commercial file hosting service Megaupload today, accusing them of copyright infringement in excess of one billion dollars. Founder of Megaupload, Kim Schmitz (known as “Kim Dot Com”), was taken into custody along with co-founder and CTO Mathias Ortmann, chief marketing officer Finn Batato, and programmer Bram van der Kolk. Over twenty search warrants were executed today in a total of nine countries, with 50 million in assets and eighteen domain names seized.
The D.O.J. claims “The conspirators allegedly paid users whom they specifically knew uploaded infringing content and publicized their links to users throughout the world”, using a rewards program to draw traffic to the service. Additionally, Megaupload is charged with failing to delete accounts found to contain infringing material — simply removing a single link to the content while duplicate links were left in place — when notified by a rights-holder.
Interestingly, Megaupload promoted Kasseem Dean to the title of CEO just yesterday. Dean, better known as “Swiss Beatz” (and husband of Alicia Keys), was recently paid to create the Mega Song, leading to a legal battle with Universal Music. At this time, he is not named in the indictment.
Given the timing, it’s easy to jump to wondering what effect this case might have on the ongoing SOPA and PIPA legislation. Most likely, both sides will try to use it to their advantage with SOPA/PIPA advocates arguing it illustrates the huge international copyright problem, while the opposition points out this case was handled without the need for additional legislation. The public tug-of-war over piracy and legislation of creators’ rights continues on, and like many arguments around this topic, both sides are using the same rope.
Sadly they allowed anyone to upload and if something was copyrighted people were supposed to flag it so the admins could delete it. This happened a lot and a lot of files got deleted. But I guess that wasn’t good enough even through an FTP site at a college works the same way, they had to sue and then ban the web site.
A lot of this is entrapment as lawyers and officials would upload copyrighted stuff and then get judges to order court orders to shut them down. This was done to BBSes before the world wide web as well. Since anyone could upload to a BBS, they uploaded copyrighted stuff and then busted the BBS owner soon later. Only the corporate multiline BBSes got left, and now they are doing it to web sites.
I used to run a few web sites, had to disable my FTP server because of all the cracking attempts to crack the password of accounts for it, after I disabled uploads from the anonymous account. Someone was uploading copyrighted stuff and other crap, I deleted it after disabling the anonymous account, and so they went after the other accounts forcing me to shut down the FTP server. So then they tried to crack into the accounts for the web server itself. I eventually took the web sites down, as IPs from around the world tried to crack my web server and a simple IP block could not stop them.
so is File Jungle, FileServe, Filesonic, HotFiles, etc in trouble next.. Stay tuned..