Thread: Megaupload gets shut down

Mixtape mecca and openair piracy expo Megaupload has a serious problem: it's just been shut down by the feds. The feds. And they didn't even need SOPA!

The federal indictment accuses Megaupload—which shocked the internet with the revelation that rap producer Swizz Beatz is for some reason its CEO—of over $500 million in lost media revenue from hosting pirated media. They had quite a run, though! Megaupload boasted "more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet," according to the DoJ. And some famous friends.

Lucky for us, there are plenty of alternatives to Megaupload. And luckily for Swizz Beatz, he's still a super-successful rap producer, an NYU professor, and Alicia Keys' husband. Not so lucky? The crazily named MP3 baron and Megaupload founder Kim "Dotcom" Schlitz who is now in the slammer awaiting prosecution. Dotcom's had a busy past few years, racking up up embezzlement charges, multiple arrests, a lardy face, and most recently, ownership of one of New Zealand's most fabulous houses.

Let's also think about the timing of this bust. It's a pretty spectacular coincidence that the Department of Justice Task Force on Intellectual Property was able to destroy a copyright villain without any help from SOPA or PIPA the day after the internet's giant SOPA protest. Do you hear that, lawmakers? The law, as it stands right now was able to kill Megaupload.com, no draconian censorship powers required. The power you have now—with due process—is achieving the things you say you want to do. Your IP is protected. Online piracy was stopped, except for the dozens of Megaupload rivals like HulkShare and MediaFire. And I wouldn't be surprised if they're next. [AP]

Update: The WSJ says seven Megaupload employees are under arrest, with four already locked down—four of them in New Zealand! No word if one of them is Swizzy himself.

Update 2: As of 13 hours ago on Twitter, Mr. Beatz did not seem to give a shit about anything.

Update 3: The AP reports the following statement from Megaupload: "The fact is that the vast majority of Mega's Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch."

Well, not really, no.

Update 4: The Department of Justice has issued a gleeful statement regarding the takedown, coordinated with police around the world, calling it "among the largest criminal copyright cases ever brought by the United States," and listed the individual charged with "racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement."

http://gizmodo.com/5877612/feds-kill-megaupload

Anonymous has launched a pair of operations in response to the takedown of the Megaupload.com site earlier today by the FBI and other authorities and continued support for the Stop Online Piracy Act by members of Congress. So far, the sites of the Justice Department, Universal Music Group, and several congressional sites have been affected.

The attacks began as Anonymous' Sabu called for people to boycot paid media in all forms and supporting torrent and file sharing sites. "This new, massive operation, will target on SOPA/PIPA in a way that the government was not expecting," he posted on Twitter. "We are going to starve the beast." In response to the arrest of Megaupload.com's founders, he said, "This is the governments way of saying: 'How nice of you protest SOPA/PIPA. But we still are in control.' Fuck this."

At just before 4PM CT on January 19, both the websites of the Department of Justice and Universal Music were made unavailable by denial of service attacks. Anonymous' Barrett Brown told RT.com that "It was in retaliation for Megaupload, as was the concurrent attack on Justice.org." Both sites are still down, and more attacks are being mounted; Anonymous members have now targeted the sites of the Motion Picture Association of America and the White House, and other government sites.

Additionally, in a wave of attacks labelled "OpDonkeyPunch" by Barrett Brown, the frequent spokesperson for Anonymous, the group is targeting Democrats in Congress who support SOPA, attacking their websites. Brown also published the fax machine phone number for Republican Rep. Lamar Smith, sponsor of SOPA.

http://arstechnica.com/tech-policy/n...v-underway.ars

Why the feds smashed Megaupload

The US government dropped a nuclear bomb on "cyberlocker" site Megaupload today, seizing its domain names, grabbing $50 million in assets, and getting New Zealand police to arrest four of the site's key employees, including enigmatic founder Kim Dotcom. In a 72-page indictment unsealed in a Virginia federal court, prosecutors charged that the site earned more than $175 million since its founding in 2005, most of it based on copyright infringement.

As for the site's employees, they were paid lavishly and they spent lavishly. Even the graphic designer, 35-year-old Slovakian resident Julius Bencko, made more than $1 million in 2010 alone.

The indictment goes after six individuals, who between them owned 14 Mercedes-Benz automobiles with license plates such as "POLICE," "MAFIA," "V," "STONED," "CEO," "HACKER," GOOD," "EVIL," and—perhaps presciently—"GUILTY." The group also had a 2010 Maserati, a 2008 Rolls-Royce, and a 1989 Lamborghini. They had not one but three Samsung 83" TVs, and two Sharp 108" TVs. Someone owned a "Predator statue." Motor bikes, jet skis, artwork, and even 60 Dell servers could all be forfeit to the government if it can prove its case against the members of the "Mega Conspiracy."

The case is a major one, involving international cooperation between the US, Hong Kong, the Netherlands, the UK, Germany, Canada, and the Philippines. In addition to the arrests, 20 search warrants were executed today in multiple countries.

No safe harbor for you

Going after Megaupload, one of the most popular sites in the world, might seem a strange choice. (As an example of its scale, Megaupload controlled 525 servers in Virginia alone and had another 630 in the Netherlands—and many more around the world.) For years, the site has claimed to take down unauthorized content when notified by rightsholders. It has registered a DMCA agent with the US government. It has created an “abuse tool” and given rightsholders access. It has negotiated with companies like Universal Music Group about licensing content. And CEO Kim Dotcom sent this curious e-mail to PayPal in late 2011:

Our legal team in the US is currently preparing to sue some of our competitors and expose their criminal activity. We like to give you a heads up and advice [sic] you not to work with sites that are known to pay up loaders for pirated content. They are damaging the image and the existence of the file hosting industry (see what's happening with the Protect IP Act). Look at Fileserve.com, Videobb.com, Filesonic.com, Wupload.com, Uploadstation.com. These sites pay everyone (no matter if the files are pirated or not) and have NO repeat infringer policy. And they are using PayPal to pay infringers.

But the government asserts that Megaupload merely wanted the veneer of legitimacy, while its employees knew full well that the site's main use was to distribute infringing content. Indeed, the government points to numerous internal e-mails and chat logs from employees showing that they were aware of copyrighted material on the site and even shared it with each other. Because of this, the government says that the site does not qualify for a “safe harbor” of the kind that protected YouTube from Viacom's $1 billion lawsuit.

For instance, the “abuse tool” allegedly does not remove the actual file being complained about by a rightsholder. Instead, it only removes a specific Web address linked to that file—but there might be hundreds of such addresses for popular content.

In addition, the government contends that everything about the site has been doctored to make it look more legitimate than it is. The “Top 100” download list does not “actually portray the most popular downloads,” say prosecutors, and they claim that Megaupload purposely offers no site-wide search engine as a way of concealing what people are storing and sharing through the site.

Megaupload employees apparently knew how the site was being used. When making payments through its “uploader rewards” program, employees sometimes looked through the material in those accounts first. "10+ Full popular DVD rips (split files), a few small porn movies, some software with keygenerators (warez)," said one of these notes. (The DMCA does not provide a "safe harbor" to sites who have actual knowledge of infringing material and do nothing about it.)

In a 2008 chat, one employee noted that "we have a funny business... modern days [sic] pirates ," to which the reply was, "we're not pirates, we're just providing shipping servies [sic] to pirates ."

Employees send each other e-mails saying things like, “can u pls get me some links to the series called ‘Seinfeld’ from MU [Megaupload]," since some employees did have access to a private internal search engine.

Employees even allegedly uploaded content themselves, such as a BBC Earth episode uploaded in 2008.

Other messages appear to indicate that employees knew how important copyrighted content was to their business. Content owners had a specific number of takedown requests they could make each day; in 2009, for instance, Time Warner was allowed to use the abuse tool to remove 2,500 links per day. When the company requested an increase, one employee suggested that "we can afford to be cooperative at current growth levels"— implying that if growth had not been so robust, takedowns should be limited. Kim Dotcom approved an increase to 5,000 takedowns a day.

Employees also had access to analytics. One report showed that a specific linking site had “produce[d] 164,214 visits to Megaupload for a download of the copyrighted CD/DVD burning software package Nero Suite 10. The software package had the suggested retail price of $99.” The government's conclusion: Megaupload knew what was happening and did little to stop it.

The need for care

Yet the indictment seems odd in some ways. When Viacom made many of the same charges against YouTube, it didn't go to the government and try to get Eric Schmidt or Chad Hurley arrested.

It's also full of strange non-sequiturs, such as the charge that "on or about November 10, 2011, a member of the Mega Conspiracy made a transfer of $185,000 to further an advertising campaign for Megaupload.com involved a musical recording and a video." So?

The money probably paid for a video that infuriated the RIAA by including major artists who support Megaupload. Megaupload later filed claims in US courts, trying to save the video, which it says was entirely legal, from takedown requests. (The RIAA has long said the site operators "thumb their noses at international laws, all while pocketing significant advertising revenues from trafficking in free, unlicensed copyrighted materials.")

Given that the site was already using US courts to file actions; given that the government had Megaupload e-mails talking about using US lawyers to file cases against other "pirate" sites; given that the site did at least take down content and built an abuse tool; and given that big-name artists support the site, the severity of the government's reaction is surprising.

There's no doubt that the indictment makes Megaupload look bad, though, and we're quite curious to see what comes of the case—especially once the site has a chance to respond.

Law professor James Grimmelman of NYU tells Ars, "If proven at trial, there's easily enough in the indictment to prove criminal copyright infringement many times over. But much of what the indictment details are legitimate business strategies many websites use to increase their traffic and revenues: offering premium subscriptions, running ads, rewarding active users.

"I hope that if this case goes to trial and results in convictions, that the court will be careful in sorting out just what Megaupload did that crossed the line of criminality."

The MPAA doesn't have any doubts, though. "By all estimates, Megaupload.com is the largest and most active criminally operated website targeting creative content in the world," it said in a statement. "This criminal case, more than two years in development, shows that law enforcement can take strong action to protect American intellectual property stolen through sites housed in the United States."

http://arstechnica.com/tech-policy/n...megaupload.ars

The Internet Strikes Back #OpMegaupload
Within minutes of the site being shut down, and DOJ releasing its statement, Anonymous sprang into action and started taking down a ton of sites -- including websites for the DOJ, the US Copyright Office, Universal Music, the RIAA, the MPAA and a bunch of other sites.



AnonOps Communications

I never cared for the site myself, but it's not like they never saw it coming. Although this is the start of the end of the torrents, USA is on the mission to kill file sharing...

When someone like Netflix is here in Aus, and is charging reasonable prices for content that is released shortly if not when it's in America, I'll stop using torrents.

Start of the end of torrents - I think not. TPB is moving to a magnet only search engine that one can download and run externally on a USB drive or similar.
It is going modular and will never stop existing.

mu has nothing to do with torrents, it was a file host.
it was nothing special, there's heaps of them out there
i've used it before it was pretty average, all the users will just switch to rapidshare or one of the other hundreds of filehosts out there

I realise this, what I'm saying is when you start moving through and shutting down the likes of, napster, limewire, MU, then really whats their biggest threat? It won't happen tomorrow but it's part of the end game. Everything is getting very serious. I wouldn't be surprised if Australia try to make a new policy of file sharing and the beloved proposed firewall, when they see what happens over in the US.

FBI website hit.

Man, New Zealanders must be pissed at their government for allowing another country to order around there police for copyright issues.