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Jan 20, 2012

Megaupload latest casualty in new round of cyberwars

The filesharing company Megaupload has been taken down by the US Department of Justice - which was immediately brought down itself.

In a dramatic response to the increasingly sucessful internet campaign to halt the draconian SOPA and PIPA bills before Congress, US authorities have targeted one of the major filesharing sites in an international operation.

Overnight, the Megaupload site and related portals were taken down by the Department of Justice after a grand jury indicted the company. The charges against Megaupload are extensive and reek of overkill; they include racketeering, conspiracy, money laundering and copyright infringement, with the indictment terming it all “Mega Conspiracy”. Four people were arrested in New Zealand, including millionaire CEO Kim Schmitz (AKA “Kim Dotcom”), a convicted embezzler and inside trader. Assets worth $50 million are said to have been seized as well.

In response, the websites of the Department of Justice, the Universal Music Group, the Motion Picture Association of America and the Recording Industry Association of America were all taken down in a denial-of-service attack. At the time of writing, the Department of Justice site was still down. The attack, using a newer version of the LOIC software, appeared to have been coordinated by Anonymous, and was said to have been even bigger in user numbers than the attacks that took the Visa, Mastercard and PayPal sites down in response to the financial blockade of WikiLeaks in 2010.

A number of prosecutions are still pending in the US from those 2010 attacks. This time around, LOIC users are being told of the need to protect their IP addresses, and being offered legal services in the event they’re arrested.

Megaupload isn’t a torrent-based site like, for example, Pirate Bay (linking to which, incidentally, would be illegal in the US under SOPA) but an open file-sharing site used for uploading and downloading large files — which inevitably includes copyrighted content as well as legitimate content for corporate and personal use. The company behind it has long insisted it operates legally by complying with the requirements of the US Digital Millenium Copyright Act, but it is a major target of the copyright industry, and has also been blocked by China, Saudia Arabia and Malaysia.

US authorities insisted the takedown and arrests were unrelated to the SOPA debate, a claim made all the harder to believe given the US Department of Justice’s recent history of attacks on the internet. It is the DoJ that demanded confidential information from social media companies and Google about WikiLeaks supporters, and tried to keep it secret; it is the DoJ that brought together the parties that plotted an effort to destroy WikiLeaks and smear journalists and activists; it was the DoJ that proposed in November to criminalise breaching internet companies’ terms of service (you know, those 20,000 word screeds none of us ever read?).

The interesting thing about the raids, however, is that they demonstrate the remarkable power the copyright industry has under existing law to attack those it deems its enemies. The cartel was able to rely on the US Department of Justice and an international police operation to attack a company over what, before the internet, was a purely civil matter of copyright breach. In a world where the New Zealand police readily do the bidding of the US copyright industry, the provisions of SOPA are far beyond overkill.

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49 thoughts on “Megaupload latest casualty in new round of cyberwars

  1. Suzanne Blake

    Why cant we arrest the whalers in our waters if international arrests are so easy

  2. shepherdmarilyn

    Because the waters are not actually ours, we just pretend they are.

  3. Scott

    “New Zealand police readily do the bidding of the US copyright industry”

    Oh come on. The NZ police are doing the bidding of the US department of Justice.

    You can’t handle and distribute stolen goods (which is what Megaupload was doing) without some sort of effect. I think this was DOJ going after the low hanging fruit. Next will be bittorrent and piratebay.

    It’s about time for this sort of stuff. Western countries do not have the advantage of low wages present in the developing world. The only competitive advantage we have is our ability to create IP. Why shouldn’t this be protected? We need the US, Australian and other like minded authorities to try and ensure that if you create content, software, music or any other form of intellectual property, the creators will get properly compensated for it’s use worldwide. If people can get it for free, it’s pure market failure meaning those that do the right thing (i.e pay) end up paying more due to firms compensating for this leakage effect.

    Time for the free riders to start buying tickets.

  4. Suzanne Blake

    @ shepherdmarilyn

    Macquarie Island is ours, we should enforce the 12 mile limit

  5. Oscar Jones

    Yet again Bernard promotes the fantasy that sites like megaupload are innocent file sharing hosts when the majority of it’s traffic is to steal copyrighted work.

    If this piracy continues then we will have no blockbuster films, no budget art films, no movie stars and no actors who barely live on the residuals from TV work, no concerts, no X-Factor and so on.

    Yet not a word about the gigantic rapacious profit making corporations like Google who are predators-they simply link to other’s work (or host it on Blogger…does anyone want links to the tens of thousands of pirate blogs?) who because of their claims of innocence (turning a blind eye) they are going to force governments to impose draconian laws.

    This is no difference to a vast drug chain of supply. If any business knows it is used for illegal purposes they would be in the dock. All the search engines know they are used but they do not self regulate.

    It’s a sad day when I have to agree with Rupert Murdoch but the slavish devotion dished out to the t-shirted Zuckerbergs who are simply the new Murdoch style moguls is weird. The one thing Anonymous has shown us is that there are tens of thousands of kids sitting in their bedrooms who are every bit as clever as the modern day deities like the late Steve Jobs.

    The internet may be the modern day frontier but the carpetbaggers are controlling it.

  6. MartyC

    OSCAR JONES – “This is no difference to a vast drug chain of supply”
    Yeah, thank god all out laws and police and prisons were able to solve the drug problem, now all we have to do is apply the same thinking here and the world will be wonderul again.

    You can’t put the toothpaste back into this particular tube. Like it or not filesharing is a reallity, and you can’t wipe it out any more than you can wipe out drugs or prostitution. Businesses will take a hit, some may not survive, but swiming against the current will just make them drown faster.

  7. Woody

    This clearly sounds like a good idea by those ignorant to how the internet and servers like this one operate. This is like closing down Australia Post because people have mailed illegal fireworks, for example. The company states they comply with the US Digital Millenium Act, so when notified that a copyright infringement may be taking place, the suspect “upload” is removed. This is exactly how You Tube operates, and nobody is closing that down.

    It’s also worth remembering the loss of many legitimate uploads and data storage seemingly lost by closing this business.

    The entertainment industry needs to get onside with the internet, but they just don’t seem to know how. Simultaneous world wide releases, quicker sell through at realistic prices (especially in this country) etc.

    One argument you never hear is how a film/TV show seen on the net is as good as the old days of hearing a song on the radio and leading to actual physical sales of the item. “The Dark Knight” was the most bootlegged film of all time. It also went on to break box office records and sold in enormous quantities. And I can remember when they let you listen to an album before you purchased it…in the store! God forbid you do that online.

    We’re over protecting an industry who holds it’s customers in contempt. Ask the cinema exhibitors. They’re virtually only making money out of the candy bar these days when Adam Sandler’s latest “comedy” cost $80 million to make…….No, there’s no funny numbers going on in any of this as we say goodbye to yet another neighbourhood video rental outlet.

  8. Masters Jill

    i’m pretty sue if they started something like a itunes for movies/tv shows it’d take off like lightening. what itunes has shown is people don’t mind paying for content if it’s delivered in a form they want, i.e. quick access playable on all their modern devices and doesn’t *cost the earth. sure, digital file playing in home cinema is in relative infancy, but with apple getting into the market it should equal a speed up of things. like it or not, apple has brand power, that equals market saturation and technology adoption. until that happens, filesharing (i.e. “priacy” arrrggghhhh…….) will continue and until film/tv studios wake up to what people want they’ll forever be behind the 8 ball.

    *of course, with the money movie stars demand i’m sure this will remain a fantasy, another fail.

  9. Bekric Zoran

    This clearly sounds like a good idea by those ignorant to how the internet and servers like this one operate.

    After they got sued by Verizon, YouTube put a Content Management System (CMS) in place that enables copyright holders to fingerprint their content (audio, video or both) and get an alert whenever content matching theirs is uploaded. The rights holder can then decide what they want to do — remove the duplicate content, block it in some regions, just track it or even make money off it. There are quibbles one could make about it, but overall it works incredibly well.

    So, it seems parts of the internet already don’t work the way you describe. It’s not even new technology any more.

    If Megaupload had instituted something similar, they could have had the benefits of their legitimate business while avoiding pirated content and the risks associated with it. They could even have made money legitimately off such content if the copyright holder(s) had decided to leave it up or to monetize it.

    People act as if the way the internet works is due to natural law rather than human decisions, but that’s not the case. It never has been.

  10. Bekric Zoran

    Oh, one also has to admire the valiant members of Anonymous, whose idea of supporting free speech is blocking the speech of those they disagree with.

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