The Megaupload takedown

David Heath
Monday, 23 January 2012 12:22

IT Policy - Regulation

Megaupload, rated by some as the 13th most visited site on the Internet was taken down late last week by the FBI under accusation of copyright infringement, however many other rights have been infringed by their actions.

As part of that action, New Zealand police executed 10 search warrants against Kim Dotcom (nee Schmitz) who lives in a luxury mansion north of Auckland, and who apparently ran to a safe room upon their arrival.  It seems the room had to be cut open to extricate him.

New Zealand police also seized as much as $11M in local currency and 18 luxury vehicles.

Dotcom, a convicted hacker and inside trader (and citizen of Germany and Finland) was legally living in New Zealand after investing $10M in government bonds and making a substantial donation to the Christchurch recovery fund.

Just like DropBox, Rapidshare and other similar services, the primary focus of Megaupload was to act as a file sharing tool for users to store large amounts of data in the cloud for others to share.  One example quoted was of a Perth-based university lecturer who used the site to store files for his students to share.  Steve Su said, "It's like confiscating everyone's mobile phone because terrorists used them.  I don't think it's correct to penalise the technology because, based on that logic, shouldn't the internet be taken down, as this is how people infringe copyright?"

The site takedown had its origins in a complaint by US-based copyright holders asserting that users of the site had deprived them of over $500M by illegally taking their works.  Never mind that such estimates seem to be based on a full-retail price of every work multiplied by every download, yet a huge proportion of such copies would never have been made if a fee was involved.

Many have suggested that there are grounds for some kind of class action against the US Government.