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Megaupload Aftermath Signals A New Style Of Attack On Digital Piracy

Written by Anthony Munns | Posted in Forecasts, Industry


Megaupload Clones Running Scared Now Kim Dotcom Is Facing jail

Published on January 24, 2012 with 4 Comments

Megaupload could signal a new wave of legal attacks on file sharing sites:

Megaupload have seen the strong arm of US law enforcement as the site has been taken down, owners arrested and assets seized, so is this a wake up call to the global digital piracy industry that the law is after the companies who allow infringements of copyright to go ahead and not the users who utilize the sites that sit on rocky legal ground.

Megaupload spawns mega worries in download land:

With the news that Kim Dotcom is very possible going to get 20 years in the slammer after his Megaupload site was seized by the feds, it seems that sites similar to the file sharing site have taken to clarifying or completely shutting down their operations.

In new moves targeted at the owners of sites rather than users of file sharing websites, the ripples that have gone through tech land are quite enormous, with Anonymous promising to take revenge and Kim Dotcom getting a free photo shoot by the US’s finest law enforcers and a nice few extra snaps of this rather enormous mansion and insane amount of Mercedes which we gather came from the proceeds of what is being described as an illegal file sharing business.

Megaupload Mega Huge:

To give you some scale of how big Megaupload was, it routinely got 50 million users per day, this amounts to around 1,500,000,000 visits per month (1.5 billion), and god knows how many actual page views (assuming people click more than once)

This figure is quite simply staggering, and goes some way to show how the founders could have amassed such wealth, even from Google adsense you could be earning a small packet with this amount of traffic, never mind also offering premium subscriptions for faster downloads.

An interesting point made by techdirt in relation to the adsense matter, is that Megaupload was actually making cash from Google Adsense and against most peoples knowledge they actually pulled their ads from the site as it was indeed against their policy to allow adds on a site with so many questions over legality.

This quote taken from the indictment of Megaupload:

On or about May 17, 2007, a representative from Google AdSense, an Internet advertising company, sent an e-mail to DOTCOM entitled “Google AdSense Account Status.” In the e-mail, the representative stated that “[d]uring our most recent review of your site [Megaupload.com,]” Google AdSense specialists found “numerous pages” with links to, among other things, “copyrighted content,” and therefore Google AdSense “will no longer be able to work with you.”

Though the date is pre-Hollywood Google bashing!

The aftermath of Megaupload:

Even though Rapidshare has been voted legal relatively recently in Germany and the US, seeing competitors like this taken down by US law enforcers in another jurisdiction must on one hand look like a fantastic opportunity, but on the other hand the question still remains that with the US department of justice still reeling over not getting SOPA and PIPA to play with legally, maybe they are showing the world a little flex and making a show of not really needing these amendments to enforce their own agendas against global copyright theft.

Now let us take a look at Dropbox, a similar kind of site and service that uses a system for data storage and retrieval, and though we all know Dropbox as more of a personal storage system, it is now used as a means of sharing and allowing access to content via passwords or other settings on your account if you so choose.

Example: Certain news websites offer access to their Dropbox account easily so you can add images and video for stories that may be hot topics.

Others use their site and allow people access on a read only basis, so you can browse content and download, some with passwords, and some without, choice is yours.

In many ways very different than Megaupload, it still sits pretty close to the potential issues that cause Hollywood and the FBI to shout loudly on occasions.

Safe Harbor provisions of the DMCA:

The truth is that if Megaupload had complied with repeated requests to remove various copyrighted content, there could have been a chance that the US dept of justice would have backed off, indeed the way US law currently works on this matter is to give ISP’s and web hosts a form of legal protection that meant if they comply with “reasonable” requests to remove certain copyright infringing material and do as they are told, then they will not be taken down and will be allowed to continue trading or providing their service, this process and protection is called the Safe Harbor provision and is part of the Digital Millennium Copyright Act.

It is this current state of legal play that SOPA and PIPA would perhaps allow US government to circumvent to some degree and apply take downs to websites they did not like with much more will.

Mega big-boots:

It was only last month that Megaupload cheekily tried to sue UMG over the video they produced to market Megaupload.

And in response to requests to remove copyright infringing material it is reported that rather arrogant conversations internally such as this were commonplace:

Email sent from Warner to remove content:

Internal email regarding the above request from Megaupload CTO:

“We should comply with their request — we can afford to be cooperative at current growth levels.”

Now you can perhaps see how they may have dug their own grave to some degree?

All about scale:

Talking about the difference between Megaupload and Rapidshare BBC technology correspondent Rory Cellan-Jones states:

“The two key differences are the scale of unauthorised sharing, and secondly what seems to be a complete absence of legitimate uses,”

With other similar sites obviously getting advice from niche lawyers right now, it seems that it was the shear scale of the infringements that Megaupload were involved in that caused so many issues and finally lead to their demise, sites like Swiss based Rapidshare also have grounds for concern, but they do attempt in a few ways to show that they “want” to appear legitimate whereas Megaupload pretty much stuck fingers up all over the site when it was up and running.

Speaking to the BBC, Michael Moore, a partner at law firm Marks & Clerk, said:

“This is all a trend of going towards the facilitators, the organisers of this, I think in the future we will see a small number of very high-profile large actions against these facilitators….hand-in-hand with that we will see this public relations battle to show people that file-sharing is bad.”

Currently rival file sharing site FileSonic have this statement on their site, such is the concern they have that they too will become the next Kim Dotcom boom!

“All sharing functionality of FileSonic is now disabled. Our service can only be used to upload and retrieve files that you have uploaded personally,”.

The end of file sharing?

Many of you will have used Megaupload or similar sites for one reason or another in the past, so do you think we are starting to see the law catch up with this online piracy and have we all perhaps lost our minds that we assume we can simply get away with accessing content that is explicitly written into a legally binding agreement between a company and an artist or producer and only available to purchasers or rights holders?

Whatever your viewpoint, and whatever your thoughts on file sharing or Mr Kim Dotcom, the truth is that this is a landmark case for international copyright law and US law enforcement globally and will also go down as a pretty good yarn to tell the kids, and for that last reason alone I kind of like the tale and must say that the likelihood is that when one site closes another one will open in its place.

But you know what, the US government would have more of a problem with employment if they did not have fiends such as Mr Dotcom to chase and we would not get stories of fast cars and millions of dollars of stolen money to report…yeh the world would perhaps be a bit more dull!

Anthony Munns

About Anthony Munns

Anthony is the Editor in Chief and owner of Mobile Inquirer. Not quite a fully blown geek, I would actually prefer to see myself as the voice of the common man in this fascinating digital world. Stay tuned to our news on the usual channels dotted around the site! Thanks.

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4 Comments

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  1. This is one hell of a case and will no doubt have many owners of file sharing sites worried, but I can not see the law enforcers stopping global digital piracy at all, technology is too damn quick to evolve and people are so used to not paying for things such as music and films that other ways of finding a happy balance where artists and creators can make money needs to be looked into, at the end of the day are artists worth millions…… seriously?

    • Hi Larry, I have made that exact point before, why are footballers and music artists often paid so much, it is surely not because they actually deserve it.

      It is purely market forces driven at the top down and has no distinction to anything actually relevant and is based on pure greed, if file sharing eventually helps even out what the average person should get paid (so they can afford luxuries such as a football match ticket for more than a 6 year old, popcorn at a cinema and the ticket for the damn film) and some more goes to the nurses and doctors, then let me see more Megauploads, but it does not work like this in this cruel cruel world I am afraid…..;)…..

  2. Won’t change a thing.  It’s just make folks smarter (and will not make a dent in the continuing losses the media conglomerates continue to witness…).

    • Hi. I agree with you in current technology terms, but wait till there are more DRM options, things may alter over time.

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