FBI Shuts Down File-Sharing Giant Megaupload

Megaupload is accused of causing $500 million in damages. But shouldn't there be copyright convictions first?

Johnny Firecloudby Johnny Firecloud

In one of the largest criminal copyright cases ever, the massively popular file downloading site Megaupload was shut down Thursday by the Justice Department and the FBI, which seized and charged seven people connected with it with running an international enterprise based on internet piracy.

Megaupload stood as one of the most popular file storage services on the internet, allowing users to upload and share files that included movies and music, among other media. With a timeliness that borders on satirical, public uproars over antipiracy bills SOPA and PIPA in Congress ran in tandem with the arrests and seizure. The Anonymous hacker collective retaliated rapidly to the shut-down, attacking and shutting down the Justice Department websites and several major entertainment companies and trade groups.

And while media companies regularly claim copyright infringement, as Antiquiet points out, "Megaupload’s file download counters showed that the vast majority of their users’ files, weighing in at a cumulative 100 petabytes, are accessed less than 10 times in their lifetime. Meaning the typical use case is one-to-one, or one-to-few exchanges of odd files, rather than the one-to-thousands illegal content distribution that the MPAA and RIAA allege. Megaupload is not “dedicated to infringement,” and in fact is used not only by many of the artists that its accusers claim to be protecting, but also by many of the world’s largest companies for legitimate purposes."

Nevertheless, in a grand jury indictment, Megaupload is accused of causing $500 million in damages to copyright owners and of making $175 million through selling premium subscriptions and advertisement. 

Megaupload has preemptively defended these charges with the following assertion:

Mega has over 150 million registered users and over 50 million daily unique visitors. Employees of over 70% of the world’s Fortune 500 companies have accounts with us. We have become the de-facto standard for sending files that are too big to email. We are the most popular hard disk in the cloud. We host more backups than any other company. If Mega is a rogue operator as we have been unfairly labelled by the MPAA and RIAA, then what about Google? What about Yahoo? And every single ISP? At any given time, they all host pirated, illegal or even criminal content for which they are not liable nor legally obliged to prevent their users from posting. They are, like Megaupload, online service providers who are in no position to monitor or restrict their users’ activities. There are technical, practical and legal reasons why these entities as a whole enjoy safe harbor protection all over the world. Service providers like Megaupload are simply better off focusing on providing a better service to their customers than fending off lawsuits from third parties unhappy about content.

That said, all service providers have to deal with the challenge of online piracy, just like us. Google probably hosts the world’s largest index of pirated content and yet no one has characterized them as rogue. Why not sue the manufacturers of external USB hard drives or burnable DVDs? They can be used for illegal purposes, too. Microsoft’s Windows operating system is the world’s largest enabler of piracy. Windows is used to transfer and consume pirated content on a massive scale every day. And yet Microsoft is not rogue. This double standard should not be imposed on Megaupload since it finds no basis in either logic or the law. All we want is equal treatment.