- Associated Press - Thursday, January 19, 2012

MCLEAN, VA. (AP) - One of the world’s most popular file-sharing sites was shut down Thursday, and its founder and several company officials were accused of facilitating millions of illegal downloads of films, music and other content.

A federal indictment accused Megaupload.com of costing copyright holders at least $500 million in lost revenue. The indictment was unsealed one day after websites including Wikipedia and Craigslist shut down in protest of two congressional proposals intended to make it easier for authorities to go after sites with pirated material, especially those with overseas headquarters and servers.

The news of the shutdown seemed to bring retaliation from hackers who claimed credit for attacking the Justice Department’s website. Federal officials confirmed it was down Thursday evening and that the disruption was being “treated as a malicious act.”

A loose affiliation of hackers known as “Anonymous” claimed credit for the attack. Also hacked was the site for the Motion Picture Association of America and perhaps others.


Megaupload is based in Hong Kong, but some of the alleged pirated content was hosted on leased servers in Ashburn, Va., which gave federal authorities jurisdiction, the indictment said.

The Justice Department said in a statement said that Kim Dotcom, 37, and three other employees were arrested Thursday in New Zealand at the request of U.S. officials. Three other defendants are at large.

The Electronic Frontier Foundation, which defends free speech and digital rights online, said in a statement that, “This kind of application of international criminal procedures to Internet policy issues sets a terrifying precedent. If the United States can seize a Dutch citizen in New Zealand over a copyright claim, what is next?”

Before Megaupload 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.

Meanwhile, the DOJ said its web server for justice.gov was “experiencing a significant increase in activity, resulting in a degradation in service.” It was working to fix it and “investigate the origins of this activity, which is being treated as a malicious act until we can fully identify the root cause of the disruption,” the agency’s statement said.

A spokesman for the Motion Picture Association of America said in an emailed statement that the group’s site had been hacked, although it appeared to be working later in the evening.

“The motion picture and television industry has always been a strong supporter of free speech,” the spokesman said. “We strongly condemn any attempts to silence any groups or individuals.”

Megaupload 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 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.

According to the indictment, Megaupload was estimated at one point to be the 13th most frequently visited website on the Internet. Current estimates by companies that monitor Web traffic place it in the top 100.

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