Internet file sharers were in for a rude awakening on Jan. 19 when the popular site MegaUpload.com and its associated sites, including MegaVideo.com, were shut down by the FBI and several individuals connected to the site were arrested in New Zealand and charged with conspiracy to commit racketeering and criminal copyright infringement.
The life lived by the top-level MegaUpload employees was almost comical in its excess. Co-Founder Kim Dotcom owns what is believed to be the most expensive house in New Zealand and had 18 cars, with license plates such as "EVIL," "MAFIA" and "GUILTY." This luxurious lifestyle was, according to authorities, all possible thanks to rampant copyright theft.
It is true that MegaUpload was not entirely used for piracy. Many individuals used the site as a personal digital locker or to distribute legitimate files. Furthermore, some would argue that MegaUpload is not very different from YouTube, which hosts a plethora of easily accessible copyrighted content.
However, YouTube is protected from lawsuits and a shutdown by the "Safe Harbor" provision of the Digital Millennium Copyright Act, which prevents a host from being liable for copyrighted materials uploaded by users as long as they take down materials when requested by the copyright holders.
The 72-page indictment handed down by a federal grand jury at a U.S. District Court in Virginia makes the case that the heads of the site were willingly cooperating in copyright infringement on a massive scale and thus not protected by the Safe Harbor provision. If the charges are true, the arrests and shutdown were more than justified.
One email exchange between two high-level MegaUpload employees has one of them saying, "we have a funny business … modern day pirates :)" to which the other responds, "we're not pirates, we're just providing shipping services to pirates :)." Clearly, the leaders of MegaUpload were aware they were running a pirate site, but despite their claims to the contrary, they were also actively partaking in piracy.
In MegaVideo's early days, to establish its library, employees were directly copying videos from YouTube, according to the indictment. One email exchange shows a MegaUpload employee saying "Kim [Dotcom] really wants to copy Youtube one to one." Another emails asks, "Do we have a server available to continue downloading of the Youtube'svids [sic]? … Kim just mentioned again that this has really [sic] priority."
Employees themselves were also engaged in uploading and downloading copyrighted TV shows and music, according to the indictment.
MegaUpload had a rewards program in place until July 2011 that offered financial incentives for uploaders of popular content. While the official policy stated that rewards program participants would be disqualified for uploading pirated content, internal email exchanges in the indictment show rewards being paid out to individuals who the company knew were uploading ripped DVDs and copyrighted MP3s.
MegaUpload did introduce an "Abuse Tool" for copyright holders, but the tool did not function as advertised, according to the indictment, as it allegedly only removed individual links to infringing files instead of the file itself, making the tool almost useless, as there could be hundreds of different links to the same file.
It's unfortunate that users with legitimate files hosted on MegaUpload have lost access to them, thanks to the seizure of the MegaUpload domain. Furthermore, it is worrisome that the shutdown and arrests may result in legitimate digital locker providers limiting their services out of fear of similar repercussions. Already, FileSonic.com has disabled the sharing functionality of its site.
However, these concerns do not change the fact that authorities were justified in their shutdown of MegaUpload. Piracy is theft, and MegaUpload was doing plenty of it.
