FBI Shuts Down File Sharing Site Megaupload – We Need SOPA And PIPA Why?

In a bit of serendipity, the day after the big Internet protest against SOPA and PIPA the FBI acts on the powers already granted under the law to shut down a massive file sharing site

(NY Times) In what the federal authorities on Thursday called one of the largest criminal copyright cases ever brought, the Justice Department and the Federal Bureau of Investigation seized the Web site Megaupload and charged seven people connected with it with running an international enterprise based on Internet piracy.

Megaupload, one of the most popular so-called locker services on the Internet, allowed users to anonymously transfer large files like movies and music. Media companies have long accused it of abetting copyright infringement on a vast scale. In a grand jury indictment, Megaupload is accused of causing $500 million in damages to copyright owners and of making $175 million through selling ads and premium subscriptions.

Four of the seven people, including the site’s founder, Kim Dotcom (born Kim Schmitz), have been arrested in New Zealand, the authorities said; the three others remain at large. Each of the seven people — who the indictment said were members of a criminal group it called “Mega Conspiracy” — is charged with five counts of copyright infringement and conspiracy. The charges could result in more than 20 years in prison.

So, we apparently have laws that allow Government to shut down rogue websites which exist solely to share material, much of which is copyrighted. What would SOPA and PIPA do extra? And that is the concern of opponents of the S&P bills. S&P is a vast overreach by government, which would give a bloated, faceless, and unelected bureaucracy the power to police the Internet. Where would one go if they nailed your website for an explanation and relief?

Meanwhile, Anonymous went on a “revenge spree” and took down the websites of the FBI, every domain associated with the DoJ, RIAA, MPAA, EMI, the US Copyright office, and Universal Music, among others. On one hand, this seems extreme: Megaupload was, in fact, stealing content, denying the copyright holders the residuals for their intellectual property, and making tons of money themselves. How would they feel if they wrote a popular song and were denied earnings due to being shared?

On the other hand, via Scared Monkeys, consider

The Electronic Frontier Foundation, which defends free speech and digital rights online, said in a statement that, “This kind of application of international criminal procedures to Internet policy issues sets a terrifying precedent. If the United States can seize a Dutch citizen in New Zealand over a copyright claim, what is next?”

Meanwhile, Cracked writer Soren Bowie points out the only argument in favor of SOPA/PIPA . Read carefully.

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Comment by gitarcarver
2012-01-20 12:49:57

And the takedown has worked so well!

Wait… Megaupload is back again?

Who would have ever thought that?

Comment by rob in katy
2012-01-20 13:11:43

I guess that means I can be arrested by the Iranian police for pissing my Koran… NWO.

Comment by Gumball_Brains
2012-01-22 16:01:24

My question is, what jurisdiction does FBI have? The servers were in Hong Kong and Tailand. The Reuters article highlighted that the police broke in to his home after he refused to let them enter. And there was no mention of a search warrant.

The Reuters article was highly critical of the fact that he made money off of his website service. It noted how he was treated like a serial murder suspect with hundreds of cops and heavy backup.

More questions are:
Does this mean that now Amazon will be raided by hundreds of cops and their masterminds thrown in jail? Do they not offer a storage and sharing solution as well? How about sites that only store the files temporarily allowing users to send large files to friends across the globe? What if you are a search engine that produces results that have such links? Is Google and Ask.com now violating copyright for pushing that link to the users of their service?

Comment by gitarcarver
2012-01-22 16:35:08

The servers were in Hong Kong and Tailand.

The indictment charges some of the servers were located in eastern Virginia by a company called Carpathia Hosting.

Quoting the indictment:

The Mega Conspiracy leases approximately petabytes of data storage from Carpathia to store content associated with the Mega Sites. More than 1,000 computer servers in North America are owned and operated by Carpathia Hosting for the benefit of the Mega Conspiracy; more than 525 of these computer servers are currently located in Ashburn, Virginia, which is in the Eastern District of Virginia. Carpathia Hosting continues to provide the Mega Conspiracy with leased computers, Internet hosting, and support services as of the date of this Indictment.

On addition, PayPal, through whom Mega Conspiracy processed payments is in the US as well.

That gives the FBI jurisdiction for the infringement in the US. The US can talk with other law enforcement agencies in other countries to help with the arrest and extradition of those that have broken US law.

In addition, Mega Conspiracy’s “user reward” program paid cash to US citizens for allegedly uploading and distributing copyrighted material.

Do they not offer a storage and sharing solution as well?

Yes they do. The difference is that if a copyright holder contacts a reputable company under the provisions of the DCMA, the reputable company deletes the file. Mega Conspiracy did not do that.

Comment by Gumball_Brains
2012-01-22 17:04:40

Thanks for the correction of standing. Neither the NYT or Reuters articles state that servers were located in the US.

Looking through the indictment, I love how they say that this group were “global criminal masterminds” and they are guilty of money laundering.

Mega Conspiracy did not do that.

It was my understand that they did. It even stated so in the indictment. The site went through much of this same a few years ago when they came to the agreement to have increased DMCA compliance. They were allowed to remain operational then. The indictment even agrees that there are dozens and sometimes thousands of links to the same infringing content. The site asked for specific links to infringing content. That method is laid out in the DMCA. For the feds to now claim that they have to point to every link to have content removed is disingenuous.

But, based upon the indictment, a site that allows a single infringing content to be stored, and the company to make money off of it, to all advertising on the site, is all a sign of massive global criminal masterminds. Thus, again, how are Google and Amazon, etc, any different.

Comment by gitarcarver
2012-01-22 19:25:02

It was my understand that they did. It even stated so in the indictment.

With all due respect, I believe you have misread the indictment (which is, to be fair, long and tedious.)

Mega Conspiracy would remove the link to the offending material, but not the material itself as required by law.

What the group allegedly was doing was when someone uploaded a file, the company would check to see if an identical file had been uploaded previously. If there were, the company would issue a new url but keep the same file. So when Mega Conspiracy said they were complying with the DMAA, they weren’t because they were deleting only the url, and not the intellectual property referenced by the url.

What this meant was that Mega Conspiracy could have multiple url’s all pointing to the same file. When the copyright holder sent a takedown notice, Mega Conspiracy deleted one link, but the law requires them to delete the file from their servers. The rest of the links remained alive pointing to the illegal material Mega Conspiracy claimed they were deleting.

But, based upon the indictment, a site that allows a single infringing content to be stored, and the company to make money off of it, to all advertising on the site, is all a sign of massive global criminal masterminds. Thus, again, how are Google and Amazon, etc, any different.

It is not the case of a “single infringing content” with Mega Conspiracy. You have to remember the steps they took. They compared uploaded files to see if they were the same. Therefore when a DMCA notice came in and the company was required to delete the file, that should have rendered a lot of links useless. Instead, the company kept the file on their servers (which is a violation of the law) and only killed the individual link. The company had a “report abuse” button which claimed it would remove the offending property from the servers, but it did not. The company’s DMCA compliance officer knew the scam and did nothing about it.

There is a difference between Google and Amazon hosting a file without their knowledge and removing it when requested and Mega Conspiracy’s actions of hosting the file, refusing to delete if from their servers and continuing to make money from people going to that the site to dl the file that should have been deleted.


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