MEGA-UPLOAD RELOADED: THE FALLOUT

Posted: January 23, 2012 in by John Dilligent
Tags: , , ,

The MegaUpload / DOJ affair marks the opening salvo in a whole new class of warfare

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As the MegaUpload execs taken into custody on Friday make their way through their preliminary court proceedings, the chill is already setting in around the world.

The case is being heard as the debate over online piracy reaches fever pitch in Washington, where Congress is trying to craft tougher legislation. Lawmakers stopped anti-piracy legislation on Friday, postponing a critical vote in a victory for Internet companies that staged a mass online protest against the fast-moving bills.

The movie and music industries want Congress to crack down on Internet piracy and content theft, but major Internet companies such as Google and Facebook have complained that current drafts of the legislation would lead to censorship.

Critics of the U.S. Stop Online Piracy Act, or SOPA, and Protect IP Act (PIPA), quickly showed their opposition to the shutdown of Megaupload.com, with the hacker group Anonymous launching attacks on many of the websites of companies that were involved in the indictment, including the Justice Department, the FBI, the MPAA and the Recording Industry Association of America.

The shockwaves of the case appear to be spreading among rival websites offering lucrative file-sharing. FileSonic, a website providing online data storage, said in a statement on its homepage that it had halted its file-sharing services. “All sharing functionality of FileSonic is now disabled. Our service can only be used to upload and retrieve files that you have uploaded personally,”  it said.

The Justice Department’s indictment includes emails sent between MegaUpload executives that make it clear that they know they’re profiting from copyright theft, and there’s a legal precedent for shutting down sites that can be used to trade files legally, if they’re mostly used for copyright infringing file-sharing.

Peer-to-peer file-sharing services like Napster, Grokster and LimeWire have all been forced to shut down after battling with copyright holders.

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