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Megaupload Ltd was a
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a List of cities in China, city and Special administrative regions of China, special ...
-based online company established in 2005 that operated from 2005 to 2012 providing online services related to file storage and viewing. On 19 January 2012, the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
seized the domain names and closed down the sites associated with Megaupload after the owners were arrested and indicted for allegedly operating as an organization dedicated to
copyright infringement Copyright infringement (at times referred to as piracy) is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, ...
. Subsequently, HK$330 million (approximately US$42 million) worth of assets were frozen by the Customs and Excise Department of Hong Kong. The company's founder,
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island coun ...
resident Kim Dotcom, has denied any wrongdoing, and the case against Dotcom has been the subject of controversy over its legality. In 2017, a New Zealand judge ruled that Dotcom should be extradited to the United States, but Dotcom remained at liberty in New Zealand pending the results of an appeal. On 5 July 2018 the New Zealand court of appeal found Dotcom and three of his former colleagues were eligible to be extradited to the U.S. authorities. His lawyer said they would appeal to the New Zealand Supreme Court. The shutdown of Megaupload led to denial-of-service (DoS) attacks on a range of websites belonging to the U.S. government and copyright organizations by the
hacktivist In Internet activism, hacktivism, or hactivism (a portmanteau of ''hack'' and ''activism''), is the use of computer-based techniques such as hacking as a form of civil disobedience to promote a political agenda or social change. With roots in ha ...
group
Anonymous Anonymous may refer to: * Anonymity, the state of an individual's identity, or personally identifiable information, being publicly unknown ** Anonymous work, a work of art or literature that has an unnamed or unknown creator or author * Anony ...
. On , Megaupload was re-launched as Mega under the domain name mega.co.nz (later moved to mega.nz, and then to mega.io). The re-launch date was chosen to coincide with the one-year anniversary of Megaupload's takedown by the U.S.
Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice ...
.


Company and services

The company's registered office was on the 12th floor of the Shanghai Industrial Investment Building in Room 1204 in
Wan Chai Wan Chai is situated at the western part of the Wan Chai District on the northern shore of Hong Kong Island, in Hong Kong. Its other boundaries are Canal Road to the east, Arsenal Street to the west and Bowen Road to the south. The area n ...
, Hong Kong. The company web services included Megaupload.com, a one-click hosting service; Megapix.com, an
image hosting {{internet hosting, right An image hosting service allows individuals to upload images to an Internet website. The image host will then store the image onto its server, and show the individual different types of code to allow others to view that i ...
service; Megavideo.com and Megalive.com,
video hosting An online video platform (OVP), provided by a video hosting service, enables users to upload, convert, store and play back video content on the Internet, often via a structured, large-scale system that may generate revenue. Users will generally ...
services; and Megabox.com, a music hosting service. Other services included Megaclick, Megafund, Megakey and Megapay, all of which were advertisement and financial services. Along with this, four blogs were created including Megabest and Megaking. Two additional services—Megabackup and Megamovie—were in development before their closure.


Statistics

* Unique visitors: 82,764,913 * Page Views (in history): over 1,000,000,000 * Visitors per day: 50,000,000 * Reach: 4% * Registered Members: 180,000,000 * Storage: 25 petabyte (25,000
terabyte The byte is a unit of digital information that most commonly consists of eight bits. Historically, the byte was the number of bits used to encode a single character of text in a computer and for this reason it is the smallest addressable uni ...
) * Once the 13th most visited site on the Internet * According to Sandvine, MegaUpload accounted for 1% of total traffic on
fixed access Fixed access: In personal communications service (PCS), terminal access to a network in which there is a set relationship between a terminal and the access interface. A single "identifier An identifier is a name that identifies (that is, labels ...
networks in North America. * In a proceeding before the
High Court of New Zealand The High Court of New Zealand ( mi, Te Kōti Matua o Aotearoa) is the superior court of New Zealand. It has general jurisdiction and responsibility, under the Senior Courts Act 2016, as well as the High Court Rules 2016, for the administration ...
on 2 February 2012, Kim Dotcom stated that Megaupload was "hosting 12 billion unique files for over 100 million users."


Software


Mega Manager

Megaupload also released its upload/download manager, Mega Manager, a
download manager A download manager is a software tool that manages the downloading of files from the Internet, which may be built: into a Web browser, or as a, usually more sophisticated program Program, programme, programmer, or programming may refer to: ...
that featured a link-checker for Megaupload links as well as options to manage uploaded files, and to access the online control box that was on MegaUpload.


Megakey

Megakey was an
adware Adware, often called advertising-supported software by its developers, is software that generates revenue for its developer by automatically generating online advertisements in the user interface of the software or on a screen presented to the ...
application which removed bandwidth limitations on Mega services during "happy hour" periods. In return, the users running Megakey agreed to supply some personal identification and
demographic Demography () is the statistical study of populations, especially human beings. Demographic analysis examines and measures the dimensions and dynamics of populations; it can cover whole societies or groups defined by criteria such as ed ...
data and to allow the substitution of ads on third party websites they visited with those of Megaupload.


Megabox

Megabox, a new form of media downloading site, was the first of its kind. Kim "Dotcom" described Megabox as "very similar to iTunes" except that it operated in a web browser using HTML5 technology and loaded "much faster than iTunes or anything else out there".


Filebox

FileBox was a Flash applet that could be embedded onto any external webpage. It allowed users to upload content to Megaupload without having to visit the website itself or download the Mega Manager.


Reception


Unavailability

Although incorporated in Hong Kong, the company did not operate in Hong Kong. From 2009 onward, users with Hong Kong
IP address An Internet Protocol address (IP address) is a numerical label such as that is connected to a computer network that uses the Internet Protocol for communication.. Updated by . An IP address serves two main functions: network interface ident ...
es were banned from accessing the site. The reason for the block was never disclosed by Megaupload, but Hong Kong Customs officials have suggested that the block was an attempt to hinder law enforcement investigation. As of 23 May 2010, access to Megaupload was intermittently blocked by the internet authorities in Saudi Arabia by their regulator
Communications and Information Technology Commission The Communications and Information Technology Commission (CITC; ar, هيئة الاتصالات وتقنية المعلومات, Hai'at al-Ittisalat wa Tiqniyyat al-Ma`lumat) is the Saudi communications authority. It was first established under ...
. Megavideo was also intermittently blocked in the
United Arab Emirates The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (Middle East, The Middle East). It is ...
due to pornographic content being accessible through the service. From 9 June 2011 onward, the Malaysian government through
Malaysian Communications and Multimedia Commission The Malaysian Communications and Multimedia Commission (Abbreviation: MCMC; ms, Suruhanjaya Komunikasi dan Multimedia Malaysia) is a regulatory body whose key role is the regulation of the communications and multimedia industry based on the po ...
ordered all ISPs in Malaysia to block Megaupload and Megavideo. Some ISPs reportedly blocked all the sites on the list while other ISPs throttled connection speeds. In July 2011, access to Megaupload and Megavideo were blocked in
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area, the List of countries and dependencies by population, second-most populous ...
for
Reliance Entertainment Reliance Entertainment Pvt Ltd is an Indian media and entertainment company. It is a division of Reliance Group, handling its media and entertainment business, across content and distribution platforms. The company was founded on 15 February 20 ...
customers, after a court order was obtained, citing illegal copies of the 2011 film ''
Singham ''Singham'' is a 2011 Indian Hindi-language action film directed by Rohit Shetty and produced by Reliance Entertainment, based on a script by writers Yunus Sajawal and Farhad-Sajid. It serves as first installment of Shetty's Cop Universe. ...
'' on file hosting sites. On 19 January 2012, U.S. federal prosecutors in the state of
Virginia Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth are ...
shut Megaupload down and laid charges against its founder Kim Dotcom and others for allegedly breaching
copyright infringement Copyright infringement (at times referred to as piracy) is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, ...
laws. For a short time after the closure of the site, users could access material via Google's
web cache A Web cache (or HTTP cache) is a system for optimizing the World Wide Web. It is implemented both client-side and server-side. The caching of multimedias and other files can result in less overall delay when browsing the Web. Parts of the sys ...
and The Internet Archive. One day after the indictment Google and Archive.org voluntarily removed the site mirrors to avoid the responsibility of hosting a website taken down for
copyright infringement Copyright infringement (at times referred to as piracy) is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, ...
.


Criticism

In January 2011, MarkMonitor published a report entitled "Traffic Report: Online Piracy and Counterfeiting", which said that Megaupload and Megavideo were, along with RapidShare, the top three websites classified as "digital piracy", with more than 21 billion visits per year. Megaupload responded by stating: "Activity that violates our terms of service or our acceptable use policy is not tolerated, and we go to great lengths to swiftly process legitimate
DMCA The Digital Millennium Copyright Act (DMCA) is a 1998 United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or ...
takedown notices". Mark Mulligan, an analyst at
Forrester Research Forrester is a research and advisory company that offers a variety of services including research, consulting, and events. Forrester has nine North America locations: Cambridge, Massachusetts; New York, New York; San Francisco, California; McLe ...
, pointed out that the number of visits did not necessarily indicate the number of downloads of illegal material. Megaupload Toolbar was said to redirect users to a custom error page when a 404 error occurred in the user's browser. It was also said to contain spyware. FBM Software said that the Megaupload toolbar is free of
spyware Spyware (a portmanteau for spying software) is software with malicious behaviour that aims to gather information about a person or organization and send it to another entity in a way that harms the user—for example, by violating their priv ...
. When a file was uploaded to Megaupload and another file with the same hash was already found to exist, the uploader would be asked if they would like to link to the already existing file. Therefore, a single file may have contained multiple links to it. This caused some controversy, since when a DMCA takedown notice was issued only the link that was provided was removed; not necessarily the file itself.


Megaupload song controversy

On 9 December 2011, Megaupload published a music video entitled "The Mega Song", showing artists including
Kanye West Ye ( ; born Kanye Omari West ; June 8, 1977) is an American rapper, singer, songwriter, record producer, and fashion designer. Born in Atlanta and raised in Chicago, West gained recognition as a producer for Roc-A-Fella Records in the ea ...
,
Alicia Keys Alicia Augello Cook (born January 25, 1981), known professionally as Alicia Keys, is an American singer, songwriter, and pianist. A classically trained pianist, Keys started composing songs when she was 12 and was signed at 15 years old by Col ...
and will.i.am endorsing the company.
Snoop Dogg Calvin Cordozar Broadus Jr. (born October 20, 1971), known professionally as Snoop Dogg (previously Snoop Doggy Dogg and briefly Snoop Lion), is an American rapper. His fame dates back to 1992 when he featured on Dr. Dre's debut solo single, " ...
appeared in earlier versions of the video. The music video was also uploaded to YouTube, but was removed following a takedown request by the record company
Universal Music Group Universal Music Group N.V. (often abbreviated as UMG and referred to as just Universal Music) is a Dutch–American multinational music corporation under Dutch law. UMG's corporate headquarters are located in Hilversum, Netherlands and its ...
(UMG). Megaupload said that the video contained no infringing content, commenting: "we have signed agreements with every featured artist for this campaign". Megaupload requested an apology from UMG, and filed a lawsuit against the company in the
United States District Court for the Northern District of California The United States District Court for the Northern District of California (in case citations, N.D. Cal.) is the federal United States district court whose jurisdiction comprises the following counties of California: Alameda, Contra Costa, De ...
, on 12 December 2011. UMG denied that the takedown was ordered under the terms of the Digital Millennium Copyright Act, and said that the takedown was "pursuant to the UMG-YouTube agreement," which gives UMG "the right to block or remove user-posted videos through YouTube's CMS (Content Management System) based on a number of contractually specified criteria." The video was subsequently returned to YouTube, with the reasons for the UMG takedown remaining unclear. YouTube stated: "Our partners do not have the right to take down videos from YT unless they own the rights to them or they are live performances controlled through exclusive agreements with their artists, which is why we reinstated it." Lawyers for will.i.am initially said that he had never agreed to the project, but on 12 December, he denied any involvement in the takedown notice.


2012 indictments by the United States

On 19 January 2012 the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
seized and shut down the file-hosting site Megaupload.com and commenced criminal cases against its owners and others. The lead prosecutor, Neil MacBride, had formerly served as Vice President, Anti-Piracy and General Counsel, of the Business Software Alliance, where he oversaw global anti-piracy enforcement and copyright policy. On 20 January Hong Kong Customs froze more than 300 million Hong Kong dollars (US$39 million) in assets belonging to the company.


Arrests in New Zealand

Acting upon a US Federal prosecutor's request, the
New Zealand Police The New Zealand Police ( mi, Ngā Pirihimana o Aotearoa) is the national police service and principal law enforcement agency of New Zealand, responsible for preventing crime, enhancing public safety, bringing offenders to justice, and maintaini ...
arrested Dotcom and three other Megaupload executives in a leased $30 million mansion at Coatesville near
Auckland Auckland (pronounced ) ( mi, Tāmaki Makaurau) is a large metropolitan city in the North Island of New Zealand. The most populous urban area in the country and the fifth largest city in Oceania, Auckland has an urban population of about I ...
on Friday, 20 January 2012 ( NZDT, UTC+13). This was pursuant to a request from the U.S.
Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice ...
that the four be extradited for racketeering and money laundering. The raid was timed for the birthday celebration of Dotcom. Assets worth $17 million including art works and cars were seized. The four men arrested were Kim Dotcom (founder; 38 years old, from Germany), Finn Batato (CMO; 38, from Germany), Mathias Ortmann (CTO and co-founder; 40, from Germany) and Bram van der Kolk (29, from the Netherlands). On 23 January, Dotcom appeared in Auckland's North Shore District Court for a bail hearing. The crown argued against bail on the basis that he was a flight risk with a helicopter on his front lawn, while defence lawyers argued that the helicopter could not fly far enough to reach another country. They also said that Dotcom denied any criminal wrongdoing. Judge David McNaughton expressed concern at the discovery of two shotguns at Dotcom's mansion during the police raid, and deferred a decision on whether to grant bail, saying that he needed more time to review the submissions. The request for bail was turned down, with Judge McNaughton saying that "he was denied due to the risk hatMr. Dotcom would flee jurisdiction and the possibility that if he reached Germany he wouldn't be extradited to face the charges". On 3 February 2012, an appeal to the
High Court of New Zealand The High Court of New Zealand ( mi, Te Kōti Matua o Aotearoa) is the superior court of New Zealand. It has general jurisdiction and responsibility, under the Senior Courts Act 2016, as well as the High Court Rules 2016, for the administration ...
upheld the decision to deny bail. On 22 February 2012, North Shore District Court Judge Nevin Dawson overturned the previous rulings and granted bail to Kim Dotcom, saying that the risk of flight had diminished after his assets had been seized. On 5 March 2012, a formal request for the
extradition Extradition is an action wherein one jurisdiction delivers a person accused or convicted of committing a crime in another jurisdiction, over to the other's law enforcement. It is a cooperative law enforcement procedure between the two jurisdi ...
to the United States of Kim Dotcom and three other senior Megaupload staff was filed in a New Zealand court. On 30 April 2012, the New Zealand High Court ruled that around $750,000 of Kim Dotcom's assets could be returned, including a Mercedes-Benz G55 AMG and
Toyota Vellfire The is a minivan produced by the Japanese automaker Toyota since 2002. It is available as a seven or eight-seater with petrol and hybrid engine options. Hybrid variants have been available since 2003, which incorporates Toyota's Hybrid Synergy ...
that had been seized during the raid on his home. The assets in 63 bank accounts and around thirty other vehicles remained in custody. A paperwork error by the New Zealand authorities meant that Kim Dotcom's property had been seized in January 2012 without giving proper notice. The restraining order on his property was granted in April 2012. During April 2012, US district court judge Liam O'Grady stated "I frankly don't know that we are ever going to have a trial in this matter," as he found out that the company had never been formally served with criminal papers by the US. On 28 June 2012,
New Zealand High Court The High Court of New Zealand ( mi, Te Kōti Matua o Aotearoa) is the superior court of New Zealand. It has general jurisdiction and responsibility, under the Senior Courts Act 2016, as well as the High Court Rules 2016, for the administration ...
judge Justice Helen Winkelmann ruled that the
search warrant A search warrant is a court order that a magistrate or judge issues to authorize law enforcement officers to conduct a search of a person, location, or vehicle for evidence of a crime and to confiscate any evidence they find. In most countries, ...
s used to raid the home of Kim Dotcom were invalid, saying "The warrants did not adequately describe the offences to which they related. They were general warrants, and as such, are invalid." On 10 July 2012, a decision on whether Kim Dotcom and other Megaupload employees should be extradited to the United States was delayed until March 2013, in order to allow further time for legal arguments to be heard. New Zealand judge Justice Helen Winklemann said that U.S. authorities would need to provide evidence of "Internet piracy" before Dotcom was extradited. On 24 September 2012, New Zealand's Prime Minister
John Key Sir John Phillip Key (born 9 August 1961) is a New Zealand retired politician who served as the 38th Prime Minister of New Zealand from 2008 to 2016 and as Leader of the New Zealand National Party from 2006 to 2016. After resigning from bo ...
ordered an inquiry into whether staff at the
Government Communications Security Bureau The Government Communications Security Bureau (GCSB) ( mi, Te Tira Tiaki) is the public-service department of New Zealand charged with promoting New Zealand's national security by collecting and analysing information of an intelligence nature. ...
had unlawfully spied on Kim Dotcom and the other defendants in the case. Key commented "I expect our intelligence agencies to operate always within the law. Their operations depend on public trust." On 7 July 2014, it was reported that the proceedings to
extradite Extradition is an action wherein one jurisdiction delivers a person accused or convicted of committing a crime in another jurisdiction, over to the other's law enforcement. It is a cooperative law enforcement procedure between the two jurisdic ...
Dotcom from New Zealand to the USA had been delayed until February 2015. On 8 September 2014, the Court of Appeal ruled that the New Zealand Police is to return seized electronic devices unencrypted back to Dotcom and those involved. On 23 December 2015, New Zealand judge Nevin Dawson ruled that Kim Dotcom, as well as three of his colleagues, can be extradited to the United States to face copyright infringement charges. Mr. Dotcom's lawyers said they would appeal the decision.


Basis of indictment

The indictment alleged that Megaupload differed from other online file storage businesses. Media reports covering the case highlighted several points from the indictment used to support claims of illegal activity. The indictment provided instances alleged to show criminal behaviour, as well as indicating design points of Megaupload's operating model as being evidence of criminal intent: # 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 that are infrequently accessed are rapidly removed in most cases, whereas popular downloaded files are retained. (items 7–8) # Because only a small portion 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. (items 7–8) # Persons indicted have "instructed individual users how to locate links to infringing content on the Mega Sites ... nd... 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." (item 13) # Persons indicted, unlike the public, are not reliant upon links to stored files, but can search the internal database directly. It is said they have "searched the internal database for their associates and themselves so that they may directly access copyright-infringing content". (item 14) # A comprehensive takedown method is in use to identify
child pornography Child pornography (also called CP, child sexual abuse material, CSAM, child porn, or kiddie porn) is pornography that unlawfully exploits children for sexual stimulation. It may be produced with the direct involvement or sexual assault of a ...
, 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" (items 55–56) # An incentive 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, including an attempt to copy and upload the entire content of YouTube. (items 69i-l. YouTube: items 69 i,j,l,s)


Counter arguments advanced

Defense attorney Ira Rothken says that the raid was unjustly swift and did not give his client the opportunity to defend himself, quoting a similar case involving YouTube as an example of a completely different turnout. Legal commentators point out that while the indictment may be correct and Megaupload might have acted as a criminal conspiracy as said, a number of points in the indictment are based upon selective interpretations and legal concepts (described in one article as "novel theories" of the law) and could be challenged in court. A ''
Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the ...
'' analysis stated that the author was "struck by how far the indictment goes to find something nefarious"; likewise a
TechDirt Techdirt is an American Internet blog that reports on technology's legal challenges and related business and economic policy issues, in context of the digital revolution. It focuses on intellectual property, patent, information privacy and c ...
analysis concluded that while the founder of Megaupload had a significant history of "flounting the law", evidence has potentially been taken out of context or misrepresented and could "come back to haunt other online services who are providing perfectly legitimate services". Both analyses concur that other evidence could show criminality; the concerns were not irrefutable. The legal concerns included: :* Indictment cites lack of a site search as evidence supporting criminality, but in other copyright cases having a site search has been described as evidence in support of criminality and in '' Atari v. RapidShare'' not having a site search was agreed by the court as evidence of responsible activity given that some infringing content might exist and be searched for if one existed. In the case of '' IsoHunt'', the ''presence'' of a search feature was interpreted as evidence of inducement.
TechDirt Techdirt is an American Internet blog that reports on technology's legal challenges and related business and economic policy issues, in context of the digital revolution. It focuses on intellectual property, patent, information privacy and c ...
commented that "To use the lack of a feature, that previously was shown to be a problem, as evidence of a conspiracy is crazy. Damned if you do, damned if you don't." :* The "top 100" list excluded copyrighted titles, but the indictment says this was evidence of concealing, rather than avoiding downloads of, infringing materials. :* The indictment asserts as evidence that no effort was made to identify infringing files or users, in other words by acts of omission. But federal court rulings repeatedly agree that no duty exists to search these out. In particular, in ''
MGM Studios, Inc. v. Grokster, Ltd. ''MGM Studios, Inc. v. Grokster, Ltd.'', 545 U.S. 913 (2005), is a United States Supreme Court decision in which the Court ruled unanimously that the defendants, peer-to-peer file sharing companies Grokster and Streamcast (maker of Morpheus), coul ...
'' the Supreme Court looked at "substantial noninfringing uses"; mere lack of monitoring was not by itself sufficient to show wrongdoing or inducement. It may not be possible (or reasonable to require) the host to know and identify what activity is legitimate or not, as file sharing may be used by many content creators. :* Deletion after a limited period of non-download is suggested as evidence of a motive. But many legitimate sites such as
Imgur Imgur ( , stylized as imgur) is an American online image sharing and image hosting service with a focus on social gossip that was founded by Alan Schaaf in 2009. The service has hosted viral images and meme, particularly those posted on Reddit ...
remove unused content after a while to free up server space. If files were routinely deleted after a short period it could equally suggest legitimate use - because it serves users who share legitimately for a short while, and enforces removal afterwards. :* Much of the indictment, in the words of one analysis, "seems to be based on the simple assumption that encouraging more usage means they must be encouraging infringement", in other words there should be evidence of actual wrongdoing, not merely evidence of popular use. Many legitimate files are popular and popularly shared, and an assumption that paid use largely equates to infringing use would need evidence. :* Failure to remove all links following a takedown request is often legitimate. For example the same content may be uploaded by legitimate and illegitimate users. Removing the infringing ''link'' does not affect legitimate uploaders. Removing the infringing ''file'' would wrongfully cause it to be deleted for legitimate users too. Similarly, once child pornography is identified, it is ''always'' illegal for ''all'' users. But other material may be legal for some users and not for others. So the fact one case requires ''file'' removal and the other only requires ''link'' removal may well be correct conduct. :* The indictment includes
money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdicti ...
charges. But these include "basic payments" for web hosting, suggesting " lumping in"—adding matters that are in no way illegal to make a case look bad. :* Megaupload had indicated willingness to attend court in the U.S. already, and answer civil cases.


Safe harbor provisions

The US Digital Millennium Copyright Act provides
safe harbor A safe harbor or harbour is literally a "place of shelter and safety, esp. for ships". It is used in many contexts: Film and television * Safe harbor (broadcasting), established in 1978 in the US, the time period in a television schedule during wh ...
for sites that promptly take down infringing content. Safe harbor does not exist if the site has actual knowledge and does nothing about it. Moreover, the DMCA "safe harbor" is less important in criminal cases than civil cases because defeating the first element, lack of knowledge or awareness of infringement, may be easier for the prosecution than meeting the "willfulness" requirement for criminal copyright liability. In Megaupload's case, the indictment alleges DMCA provisions were used for the appearance of legitimacy – the actual material was not removed, only some links to it were, takedowns agreement was approved based on business growth rather than infringement, and the parties themselves openly discussed their infringing activities. The indictment says that Megaupload executives:
... are willfully infringing copyrights themselves on these systems; have actual knowledge that the materials on their systems are infringing (or alternatively know facts or circumstances that would make infringing material apparent); receive a financial benefit directly attributable to copyright-infringing activity where the provider can control that activity; and have not removed, or disabled access to, known copyright infringing material from servers they control."
Prosecutors said in the indictment that Megaupload was not DMCA compliant, and cited the example of an alleged infringer on the site known as "VV." Over six years, VV had allegedly uploaded nearly 17,000 files to Megavideo.com, resulting in more than 334 million views. According to prosecutors, although numerous takedown e-mails had been sent, none of the files had been deleted. In a television interview with
3 News ''Newshub'' (stylised as ''Newshub.'') is a New Zealand news service that airs on the television channels Three and Eden, as well as on digital platforms. It formerly operated across radio stations run by MediaWorks Radio until December 202 ...
, Kim Dotcom said he was not a "piracy king", and said that Megaupload had applied the provisions of the DMCA and went beyond it, by giving copyright holders direct rights to delete links. He also said that the indictment relied on a malicious interpretation of technical issues to construe its claim of criminal intent, and that there was significant legal use of Megaupload.


Criminal defense action

Kim Dotcom denied the charges filed against him and retained the services of Ira P. Rothken, an attorney who has defended several copyright infringement cases. Ira Rothken stated that there is no criminal liability for secondary copyright infringement under US law, quoting a similar case involving YouTube as an example of similar accusations which were dealt with as a civil case. Dotcom initially hired Washington, D.C. attorney Robert Bennett, who had confirmed he was going to represent Megaupload in the copyright infringement case. On 22 January 2012, Bennett withdrew from the case due to a conflict of interest with another client. As of 23 January, attorney Paul Davison was quoted as representing Megaupload's founder, Kim Dotcom, in New Zealand. At the end of April 2012, a controversy emerged over legal representation. The law firm Quinn Emanuel, retained by Megaupload to argue for the retention of Megaupload's data, said in a motion filed to the court that there was a concerted effort by the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
to deny Megaupload fair legal representation. In the brief, Quinn Emanuel alleged that several law firms dropped out of the case after the DoJ informed them of potential conflicts of interest, arguing that they wanted to call clients of the firms as witnesses. Given the size of the Megaupload, Quinn Emanuel said this "conflict of interest" argument could be applied to any law firm with experience in intellectual property rights, denying Megaupload experienced representation in a case where both law and technical issues are involved. Quinn Emanuel received such a letter but rejected the DoJ's arguments.
Techdirt Techdirt is an American Internet blog that reports on technology's legal challenges and related business and economic policy issues, in context of the digital revolution. It focuses on intellectual property, patent, information privacy and c ...
argued that while the founder of Megaupload had a significant history of "flouting the law", evidence had potentially been taken out of context or misrepresented and could "come back to haunt other online services who are providing perfectly legitimate services". Eric Goldman, a professor of law at
Santa Clara University Santa Clara University is a private Jesuit university in Santa Clara, California. Established in 1851, Santa Clara University is the oldest operating institution of higher learning in California. The university's campus surrounds the historic Mis ...
, described the Megaupload case as "a depressing display of abuse of government authority". He pointed out that criminal copyright infringement requires that willful infringement has taken place, and that taking Megaupload offline had produced the "deeply unconstitutional effect" of denying legitimate users access to their data. Other legal commentators have expressed more skepticism toward Megaupload's likelihood of defending against charges of aiding and abetting copyright infringement on "willfulness" grounds if the allegations of fact in the indictment turn out to be true. The defence has drawn on procedural errors by the prosecution to challenge the case and in a judgement at the end of May 2012, New Zealand judge
David Harvey David W. Harvey (born 31 October 1935) is a British-born Marxist economic geographer, podcaster and Distinguished Professor of anthropology and geography at the Graduate Center of the City University of New York (CUNY). He received his P ...
granted the defendants the right to the disclosure of evidence held by the FBI in preparation for the extradition trial. In his 81-page decision, he came to the assessment that the DoJ is attempting to use concepts of civil law, in particular secondary copyright infringement, in a criminal case, which creates legal issues. He also confirmed that the charges in the indictment relating to money laundering, racketeering and wire fraud are not separate criminal acts but are dependent on the claim of criminal secondary copyright infringement. In a separate development in the United States, the defense has challenged the case against Megaupload as a whole, saying the US has no jurisdiction over a foreign company and the seizure of Megaupload's assets was unlawful.

A second brief points out numerous legal errors in the indictment, declaring it "an experiment in stretching U.S. criminal law well past the breaking point."


Data retention

Following the seizure of Megaupload, concerns were raised as to what would happen to the files that had been uploaded by its users. On 20 January 2012, the Justice Department stated that "It is important to note that Mega clearly warned users to keep copies of any files they uploaded" adding that "Megaupload.com expressly informed users through its Frequently Asked Questions ('FAQs') and its Terms of Service that users have no proprietary interest in any of the files on Megaupload's servers, they assume the full risk of complete loss or unavailability of their data, and that Megaupload can terminate site operations without prior notice." On 27 January 2012, U.S. Attorney Neil H. MacBride wrote:
The Mega Servers are not in the actual or constructive custody or control of the United States, but remain at the premises controlled by, and currently under the control of, Carpathia and Cogent. Should the defendants wish to obtain independent access to the Mega Servers, or coordinate third-party access to data housed on Mega Servers, the issue must be resolved directly with Cogent or Carpathia.
In response, on 30 January 2012, Carpathia Hosting denied having access to MegaUpload files and issued a press release stating
Carpathia Hosting does not have, and has never had, access to the content on MegaUpload servers and has no mechanism for returning any content residing on such servers to MegaUpload's customers. The reference to the 2 February 2012 date in the Department of Justice letter for the deletion of content is not based on any information provided by Carpathia to the U.S. Government. We would recommend that anyone who believes that they have content on MegaUpload servers contact MegaUpload. Please do not contact Carpathia Hosting.
The
Electronic Frontier Foundation The Electronic Frontier Foundation (EFF) is an international non-profit digital rights group based in San Francisco, California. The foundation was formed on 10 July 1990 by John Gilmore, John Perry Barlow and Mitch Kapor to promote Internet ...
has started a campaign to allow legitimate users of Megaupload in the US access to their data and wants the data preserved for that reason. It has chosen to represent one such legitimate user in court and thus has sided with Megaupload and Carpathia in asking the court to retain the data. On 26 April 2012, Megaupload data negotiations began. Carpathia reported that maintaining the data costs over US$9,000 a day, and wanted to seek a formal resolution on whether to delete the data or release it to interested parties. United States district court Judge Liam O'Grady ordered all parties to return to the negotiating table. The U.S. Department of Justice noted that US$35 million had been paid by Megaupload to Carpathia, and alleged that Carpathia had knowingly profited from copyright infringement. LeaseWeb wiped all of Megaupload's data.


Retaliatory attacks by Anonymous

Following the shutdown of the Megaupload website, the website of the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
and other websites were taken offline following concerted
denial of service In computing, a denial-of-service attack (DoS attack) is a cyber-attack in which the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host conne ...
attacks attributed to
Anonymous Anonymous may refer to: * Anonymity, the state of an individual's identity, or personally identifiable information, being publicly unknown ** Anonymous work, a work of art or literature that has an unnamed or unknown creator or author * Anony ...
.
Gizmodo ''Gizmodo'' ( ) is a design, technology, science and science fiction website. It was originally launched as part of the Gawker Media network run by Nick Denton, and runs on the Kinja platform. ''Gizmodo'' also includes the subsite '' io9'', ...
concurred that it was "almost certainly the result of a quickly assembled
DDoS In computing, a denial-of-service attack (DoS attack) is a cyber-attack in which the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host conn ...
istributed Denial of Serviceattack—and easily the widest in scope and ferocity we've seen in some time", commenting that "if you had any doubts Anonymous is still a hacker wrecking ball, doubt no more". Links posted in chatrooms and on
Twitter Twitter is an online social media and social networking service owned and operated by American company Twitter, Inc., on which users post and interact with 280-character-long messages known as "tweets". Registered users can post, like, and ...
, when clicked on by unsuspecting Internet users, ran a web version of the application known as the Low Orbit Ion Cannon. On 19 January 2012, Anonymous released a statement on Pastebin.com taking responsibility for the mass attacks on websites including those of RIAA, MPAA, BMI, FBI, and others. According to the RT network, Anonymous described the attacks as "the single largest Internet attack in its history".


Possible return of data

On 31 May 2013, a New Zealand court ordered police to return any items not relevant to the case and to provide copies of relevant material to Dotcom and his associates.


Other reactions

Former French president
Nicolas Sarkozy Nicolas Paul Stéphane Sarközy de Nagy-Bocsa (; ; born 28 January 1955) is a French politician who served as President of France from 2007 to 2012. Born in Paris, he is of Hungarian, Greek Jewish, and French origin. Mayor of Neuilly-sur-Se ...
said he was satisfied with the shutdown of the website. He found the site's operators were reaping "criminal profits from the illegal distribution of copyrighted works". "The time has come for increased judicial and police co-operation between states" in the fight against online copyright infringement, he said in a statement. Web organisations have raised concerns about possible effects of the Megaupload case on the future of
file sharing File sharing is the practice of distributing or providing access to digital media, such as computer programs, multimedia (audio, images and video), documents or electronic books. Common methods of storage, transmission and dispersion include r ...
,
cloud storage Cloud storage is a model of computer data storage in which the digital data is stored in logical pools, said to be on "the cloud". The physical storage spans multiple servers (sometimes in multiple locations), and the physical environment is ty ...
, and Internet commerce. Various commentators including John C. Dvorak, Glenn Greenwald, and Julian Sanchez have written on the topic as well, particularly as it relates US government powers to take down a web site without a trial, even without new laws like
SOPA Sopa or SOPA may refer to: * Sopa (tribe), an Albanian tribe of the Sharr Mountains * Lake Sopa, Albania * School of Performing Arts Seoul, an arts high school in Seoul, South Korea * Senior Officer Present Afloat, a term used in the U.S. Navy ...
. In fact, the U.S. Dept of Justice was able to rely on PRO-IP, a law passed back in 2008, in order to shut down Megaupload. People who used Megaupload for personal and business storage, such as large audio and video files for family and work, have also voiced their complaints about the fact that they no longer had access to their files on the service. Examples cited in the media included staff at public interest group ''
Public Knowledge Public Knowledge is a non-profit Washington, D.C.-based public interest group. Founded in 2001 by David Bollier and Gigi Sohn, Public Knowledge is primarily involved in the fields of intellectual property law, competition and choice in the dig ...
'' who used it for large files, and Android cellphone software writers who described it as "one of the best ways to distribute oftware... There are a number of similar sites for this use, but Megaupload was always the fastest". File hosting websites limited the functionality of their services. FileSonic.com, one of the top ten file hosting services, withdrew the ability to share links to files. The site's main page added a banner stating "All sharing functionality on FileSonic is now disabled. Our service can only be used to upload and retrieve files that you have uploaded personally." Other file hosting websites followed suit, including FileServe.com, FileJungle.com, Uploadstation.com, x7.to and 4shared.com, by shutting down, cancelling affiliate programs or allowing users to only download what they themselves uploaded. Another large file-sharing website, Uploaded.to, ceased services for users accessing from United States-based IP addresses. According to MediaFire CEO Derek Labian, he and his file hosting company are not concerned by the Megaupload incident because "Megaupload was making a ridiculous amount of money with a ridiculously bad service... We don't have a business built on copyright infringement." A spokesperson for RapidShare similarly expressed a lack of concern, saying that "file hosting itself is a legitimate business", pointing out that Microsoft's SkyDrive operates on a similar basis. BTJunkie, a website indexing
torrent file In the BitTorrent file distribution system, a torrent file or meta-info file is a computer file that contains metadata about files and folders to be distributed, and usually also a list of the network locations of trackers, which are compute ...
s, shut down voluntarily on 6 February 2012. The file hosting site Turbobit.net blocked access to U.S. visitors, and QuickSilverScreen, a site offering
streaming video Video on demand (VOD) is a media distribution system that allows users to access videos without a traditional video playback device and the constraints of a typical static broadcasting schedule. In the 20th century, broadcasting in the form of ...
links, closed on 7 February 2012.


See also

* Legal aspects of file sharing * Library.nu * Megaupload legal case * Seizure of Megaupload


References


External links


Websites operated by Megaupload

* * * * *
Megaporn


Articles

* * *


Court Documents

* ** *** *** ** *** ***


Other

* * {{DEFAULTSORT:Megaupload 2005 establishments in Hong Kong Defunct websites Former video hosting services Hong Kong websites Image-sharing websites Internet properties disestablished in 2012 Internet properties established in 2005 Internet services shut down by a legal challenge Kim Dotcom Notorious markets One-click hosting