Megaupload Data Safe for Another Two Weeks

The data on Megaupload will not be erased for at least two more weeks, Cnet reports citing Megaupload lawyer Ira Rothken.
The data on the file hosting service, whose founders have been accused of piracy and money laundering, was in danger to be erased as soon as Thursday, Feb. 2, as the site’s assets were frozen and it was unable to pay its hosting fees.
“The hosting companies have been gracious enough to provide additional time so we can work out some kind of arrangement with the government,” said Rothken.
The authorities have made backups of some of the data, which is to be used as evidence, but not all of it. The deletion of all the data on Megaupload would harm users which used the service for perfectly legal purposes.
One of the hosting companies which stores some of the Megaupload data, Carpathia hosting, told us they simply cannot return users their data. “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.(…) We would recommend that anyone who believes that they have content on MegaUpload servers contact MegaUpload. Please do not contact Carpathia Hosting,” said Carpathia in a statement.
Hopefully, the authorities and Megaupload will find a solution to give the users a way to retrieve their data before it’s erased.
Megaupload founder Kim Dotcom (a.k.a. Kim Schmitz) and six others who ran the site were indicted by The U.S. Department of Justice (DOJ) in January. They are accused of making $175 and causing $500 million in copyright infringement; if they’re found guilty, they’re looking at a maximum 20 years prison sentence.

06:35 by Robert dawne · 0

Megaupload Data Could Be Erased This Week

All the data on Megaupload – legal or illegal – could be erased as soon as Thursday, Feb. 2, the Associated Press reports.
The file storage website hires outside companies – Carpathia Hosting Inc. and Cogent Communications Group Inc – to store its users’ data.
Since Megaupload’s assets have been frozen, the service cannot pay the hosting companies to keep hosting the data. According to a letter by the U.S. Attorney’s Office for the Eastern District of Virginia, filed in the case Friday, Jan 27, they could begin deleting data Thursday.
Megaupload attorney Ira Rothken says the company is doing what it can to try to keep the data from being deleted. “We’re cautiously optimistic at this point that because the United States, as well as Megaupload, should have a common desire to protect consumers, that this type of agreement will get done,” he said.
If the data is indeed erased, it will be very bad news for some 50 million people who’ve used Megaupload’s services, many of them legally.
The U.S. Department of Justice (DOJ) indicted seven people and two companies which ran Megaupload earlier in January. The site’s founder Kim Dotcom (a.k.a. Kim Schmitz) and six others are accused of making $175 and causing $500 million in copyright infringement.
If they’re found guilty in what the indictment calls a “Mega Conspiracy”, the accused could go to prison for a maximum of 20 years.

05:55 by Robert dawne · 0

Megaupload’s Kim Dotcom Loses ‘Call of Duty’ Top Spot While in Prison [VIDEO]

Megaupload founder Kim Dotcom can’t defend his top-spot score in the game Modern Warfare: Call of Duty 3 from behind bars — he was recently bumped to the no. 2 spot by a player named Azaros.
On Wednesday, a judge denied Dotcom bail, meaning he likely won’t be able to usurp Azaros’ Modern Warfare 3 title anytime soon.
But Kim Dotcom, 38, has more troubling concerns than his gaming title. Last week, Dotcom appeared in court to face charges of copyright infringement to the tune of $175 million, and he allegedly cost copyright holders $500 million in lost revenue due to his Megaupload website.
Dotcom became the best Modern Warfare 3 player on New Year’s Eve and celebrated with friends who threw confetti on him [scroll down to see the video]. It appears as though the Megaupload millionaire adores everything “mega” — including his player name on the game: MEGARACER. The New Zealand Herald reported that a room in Dotcom’s New Zealand mansions has seven 60-inch televisions, each with its own Xbox and Lazyboy reclining chair, which from the looks of the background in the video, it may be the place where he took the no. 1 spot.
Kim Dotcom, whose real name is Kim Schmitz and is a German citizen, was arrested and detained on Jan. 20 along with three alleged accomplices in New Zealand. Because some of Megaupload‘s servers were based in Virginia, United States authorities were able to get involved in the case. He is waiting extradition to the United States to face the charges.
A fifth suspect was arrested this past Wednesday in the Netherlands. Authorities are still looking for two more suspects linked to Megaupload.
Nabbing a high-ranking score in a video game that sold more than 15 million copies takes obsessive dedication. Ironically, Megaupload might have made it even harder to reach that top spot by facilitating free downloads of games such as Modern Warfare 3.

19:47 by Robert dawne · 0

Megaupload in pictures

A week has already passed since the closure of Megaupload (file hosting) and Megavideo (video player). Seven people were arrested in this case two of which were released yesterday afternoon, while the demand for release of the iconic boss Kim Dotcom, was rejected by New Zealand authorities. Today we present the case Megaupload images.

 

Kim Dotcom

 

12:01 by Robert dawne · 0

"We're just like YouTube," Megaupload lawyer tells Ars

Megaupload's US attorney, Ira Rothken, has a succinct description of the US government case against his client: "wrong on the facts and wrong on the law."
The week has been a busy one for Rothken, a San Francisco Internet law attorney who has previously represented sites like isoHunt and video game studios like Pandemic. When I call, he's eating crab cakes and waiting for yet another meeting to start, but he has plenty of time to attack the government's handling of the Megaupload case.
In Rothken's words, the government is acting like a "copyright extremist" by taking down one of the world's largest cloud storage services "without any notice or chance for Megaupload to be heard in a court of law." The result is both "offensive to the rights of Megaupload but also to the rights of millions of consumers worldwide" who stored personal data with the service.
The best way to look at Megaupload, he says, is through the lens of Viacom's $1 billion lawsuit against YouTube—an ongoing civil case which Viacom lost at trial. (It is being appealed.)
For instance, Viacom dug up an early e-mail from a YouTube co-founder to another co-founder saying: "Please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it."
"Whatever allegations that they can make against Megaupload they could have made against YouTube," he says of the government. "And YouTube prevailed!" (Rothken made a similar case when he represented search engine isoHunt in 2010, saying it was just like Google.)

Under this view, Megaupload should have been served with DMCA takedown notices (the site did have a registered DMCA agent, as required by law, though not until 2009). If rightsholders believed that was insufficient, they should have conferred with Megaupload's US counsel (the company has retained US attorneys for some time before the current action). And if that wasn't satisfactory, a civil copyright infringement lawsuit should have been filed, one that would not have taken the site down first and asked questions later.
Instead, the government's willingness to pursue the case as an international racketeering charge meant "essentially only sticking up for one side of the copyright vs. technology debate." The result, Rothken says, is "terrible chilling effect it's having on Internet innovators" who feature cloud storage components to their business.
The US Department of Justice released a lengthy statement to the press detailing the charges against Megaupload, while New Zealand police publicly offered crazy details of their bid to arrest Megaupload founder Kim Dotcom (born Kim Schmitz). "Police arrived in two marked Police helicopters," said New Zealand Detective Inspector Grant Wormald at a press conference. "Despite our staff clearly identifying themselves, Mr. Dotcom retreated into the house and activated a number of electronic locking mechanisms. While Police neutralised these locks he then further barricaded himself into a safe room within the house which officers had to cut their way into. Once they gained entry into this room they found Mr Dotcom near a firearm which had the appearance of a shortened shotgun. It was definitely not as simple as knocking at the front door."

This sort of thing makes Rothken furious. Using "James Bond tactics with helicopters and weaponry, and breaking into homes over what is apparently a philosophical debate over the balance between copyright protection and the freedom to innovate, are heavy-handed tactics, are over-aggressive, and have a detrimental effect on society as a whole," he said. In addition, the raid was a reminder that bills like the Stop Online Piracy Act "ought not to ever be passed, because these tactics [the helicopters, etc.] are so offensive that if you take the shackles off of government, it may lead to more abuse, more aggression."
Rothken also suggested that the timing of the raid was suspicious; "over a two-year period, they happened to pick the one week where SOPA started going south."
I asked about specific allegations in the indictment, including the government's quotation of internal e-mails showing employees asking for and uploading copyrighted material. Rothken wouldn't address any specifics, but he did claim the government had engaged in some highly selective editing, choosing a few "bad communications" out of terabytes of seized data. It's as if one were to "judge the character of a person by the three worst things they ever did as a college student and ignored all the things they did as an adult."
For now, the case remains in New Zealand, where questions of bail and then extradition are being handled by local courts. Though the entire case could take a long while to wind its way to completion, Rothken concludes, "Megaupload believes strongly it's going to prevail."

Spin room

This is not a view that convinces either the US government or major copyright holders. Michael Fricklas, general counsel of Viacom and the man overseeing the company's litigation against YouTube, finds the Megaupload/YouTube comparison to be "quite a spin."

"The indictment shows that Kim Dotcom was deeply involved in every aspect of the site, designed the site to encourage infringement, helped specific users find pirated content and improve the piracy experience, paid uploaders who were also in it for money, and knew about lots of very specific infringement," he told me this afternoon. "Thus, even under YouTube's extreme view of the DMCA protections, the DMCA would provide no defense. Criminal and civil proceedings each have a different set of processes and outcomes, and are certainly not mutually exclusive. There are many times—such as in the case of Megaupload—where it is entirely appropriate for both types of action to take place."
A Department of Justice spokesperson told me that the government only goes after groups that show enough evidence of "willful" criminal conduct to take them beyond the realm of merely civil litigation, and that Megaupload certainly qualifies thanks to the same factors mentioned by Fricklas.
As for the timing of the arrests, the DOJ says it had nothing to do with the SOPA debate. After nearly two years of investigation involving many different countries, the indictment against Megaupload was returned by the grand jury investigating the group on January 5 of this year—almost two weeks before the big anti-SOPA protests captured the Web's attention. The arrests themselves—complete with their police helicopters and safe room in-breaking—took place shortly after New Zealand police obtained arrest warrants.
What the case may show more than anything else is the sheer disparity between the dueling worldviews involved. Was the Megaupload takedown an offensive assault on innovators who may have, on a few occasions, done something a tiny bit naughty—or was it a massive Mega-conspiracy worthy of an international police takedown?

07:59 by Robert dawne · 0

If the feds can shut down Megaupload, why do we need SOPA?

For more than a year, the Motion Picture Association of America and the Recording Industry Association of America have argued that existing laws were insufficient to deal with the problem of "rogue sites" hosted overseas. They've been pushing bills like the Stop Online Piracy Act (SOPA) and the PROTECT IP Act as essential weapons in the fight.
But evidently, American law enforcement didn't get the memo that they were powerless against overseas file-sharing services. The day after the Internet's historic protest of SOPA and PIPA last week, the United States government unsealed an indictment against the people behind Megaupload, one of the largest sites on the Internet. Four senior Megaupload officials were arrested in New Zealand on Thursday, and officials seized millions of dollars in assets.
As we reported Thursday, the FBI worked with authorities from New Zealand, Hong Kong, the Netherlands, Canada, Germany, the UK, and the Phillipines to catch the defendants and seize their assets. Law enforcement officials froze accounts at banks based in Singapore, Hong Kong, New Zealand, the Phillipines, and Germany. The feds also seized numerous servers, cars, pieces of artwork, televisions, and other assets. The list of seized assets in the indictment was six pages long.
So if the US government already has the power to arrest people and seize assets in places as far away as Germany, New Zealand, and the Philippines, are the new enforcement powers sought by content companies even necessary? We posed that question to two people on opposite sides of the SOPA debate. Cara Duckworth is a spokeswoman for the Recording Industry Association of America. And Julian Sanchez is a research fellow at the Cato Institute and an occasional contributor to Ars Technica.

Beyond domain seizures

Duckworth told Ars that "under the 2008 PRO IP law, the federal government has the authority to shut down US-registered sites that are overwhelmingly dedicated to piracy—sites with a .com or .org domain. So Megaupload.com falls within US jurisdiction." She argued that new laws are needed to deal with sites at domain names not under US control, such as .hk or .ru.
But Sanchez argued that the seizure of the megaupload.com domain was a fairly minor part of the government's offensive against Megaupload. "If you're really interested in shutting down an illegal enterprise that is located overseas, shutting down one domain or another is a lot less effective than getting your hands on the people and subjecting them to penalties or jail," he said.
By itself, seizing megaupload.com would have simply caused the site to move to megaupload.tv or megaupload.ru, he said. It was the government's ability to lock up Kim Dotcom and his lieutenants, and to take their servers and freeze their bank accounts, that took the site down for good.
We pressed Duckworth on this point, and she suggested that the Megaupload operation may not work as a good model for counter-piracy operations in general. "Law enforcement cooperation for US criminal investigations may not go as far in certain countries such as Russia and China where they have lax copyright laws and a huge piracy problem," she said. In addition, countries like Russia will also not extradite their citizens.
It's true that many countries won't help the US with such investigations (note that the countries involved in investigating Megaupload are all traditional US allies), but sticking your rogue site in such a country comes with its own set of problems. Sanchez pointed out that Megaupload's business model depends on hosting large volumes of user-submitted material without scrutinizing their contents. That business model is unlikely to work well in repressive regimes. For example, he said, it's true that the Iranian government would be unlikely to help the FBI take down an Iranian version of Megaupload. However, he said, "I hear there was quite a lot of pornography on Megaupload."
A similar point applies to China. "If you try to create Megaupload in China, SOPA would be the least of your worries," Sanchez said. China requires websites based inside its Great Firewall to comply with a comprehensive censorship regime. It would be difficult to comply with those rules while maintaining Megaupload's anything-goes philosophy to file hosting.
For rogue site operators, the trick is to find a country with great Internet infrastructure, weak IP enforcement, and little censorship. But finding all three is tricky, as shown by the fact that Megaupload actually leased hundreds of servers within the US to provide a good experience to US residents despite the obvious risks this posed.

Diplomatic pressure

Moreover, while relations between the US and countries like China and Russia can be frosty, Sanchez said it's not true that the US government has no leverage there. For example, in 2007, the Russian government shut down AllOfMP3, a notorious source of unauthorized copies of major-label music.
Sanchez pointed out that the Chinese government does conduct periodic crackdowns on traditional, physical piracy, often under pressure from the US. Shutting down a website like Megaupload would be a much easier job than clearing Chinese markets of merchants hawking bootleg DVDs.
"This is a familiar story," he told Ars. "The whole international intellectual property system has basically been operating on treaties, on diplomatic pressure. This is how we've been working internationally to have a stable IP system for decades. So I don't know why that suddenly doesn't work" for rogue sites.
Disclosure: I'm an adjunct scholar at the Cato Institute, an unpaid position.

Photograph by Erwyn van der Meer

 

08:18 by Robert dawne · 0

megaupload has been seized, a screenshot of the website

megaupload   has been seized, a screenshot of the website

17:24 by Robert dawne · 0

Feds Shut Down Megaupload.com File-Sharing Website

McLEAN, Va. (AP) — One of the world’s largest file-sharing sites was shut down Thursday, and its founder and several company executives were charged with violating piracy laws, federal prosecutors said.
An indictment accuses Megaupload website.com of costing copyright holders more than $500 million in lost revenue from pirated films and other content. The indictment was unsealed one day after websites including Wikipedia and Craigslist shut down in protest of two congressional proposals intended to thwart online piracy.

The Justice Department said in a statement said that Kim Dotcom, formerly known as Kim Schmitz, and three others were arrested Thursday in New Zealand at the request of U.S. officials. Two other defendants are at large.
Megaupload website was unique not only because of its massive size and the volume of downloaded content, but also because it had high-profile support from celebrities, musicians and other content producers who are most often the victims of copyright infringement and piracy. Before the website was taken down, it contained endorsements from Kim Kardashian, Alicia Keys and Kanye West, among others.

The Hong Kong-based company listed Swizz Beatz, a musician who married Keys in 2010, as its CEO. He was not named in the indictment and declined to comment through a representative.
Before the site was taken down, it posted a statement saying allegations that it facilitated massive breaches of copyright laws were “grotesquely overblown.”
“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,” the statement said.

The site boasted 150 million registered users. A lawyer who represented the company in a lawsuit last year declined comment Thursday.
Megaupload website is considered a “cyberlocker,” in which users can upload and transfer files that are too large to send by email. Such sites can have perfectly legitimate uses. But the Motion Picture Association of America, which has campaigned for a crackdown on piracy, estimated that the vast majority of content being shared on Megaupload website was in violation of copyright laws.
The website allowed users to download films, TV shows, games, music and other content for free, but made money by charging subscriptions to people who wanted access to faster download speeds or extra content. The website also sold advertising.

The indictment was returned in the Eastern District of Virginia, which claimed jurisdiction in part because some of the alleged pirated materials were hosted on leased servers in Ashburn, Va.
Dotcom, a resident of both Hong Kong and New Zealand, and a dual citizen of Finland and Germany, made more than $42 million from the conspiracy in 2010 alone, according to the indictment.
Dotcom is founder, former CEO and current chief innovation officer of Megaupload website.

Techland

15:52 by Robert dawne · 0