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Popular file-sharing website Megaupload shut down
The five-count indictment, which alleges copyright infringement as well as conspiracy to commit money laundering and racketeering, described a site designed specifically to reward users who uploaded pirated content for sharing, and turned a blind eye to requests from copyright holders to remove copyright-protected files.
For instance, users received cash bonuses if they uploaded content popular enough to generate massive numbers of downloads, according to the indictment. Such content was almost always copyright protected.
The site boasted 150 million registered users and about 50 million hits daily. The Justice Department said it was illegal for anyone to download pirated content, but their investigation focused on the leaders of the company, not end users who may have downloaded a few movies for personal viewing.
A lawyer who represented the company in a lawsuit last year declined comment Thursday. Efforts to reach an attorney representing Dotcom were unsuccessful.
Megaupload 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 was in violation of copyright laws.
The website allowed users to download some 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. Prosecutors there have pursued multiple piracy investigations.
Steven T. Shelton, a copyright lawyer at the Cozen O’Connor firm in New York, said opponents of the legislation are worried the proposals lessen the burden for the government to target a wide variety of websites. Shelton said he expects to see the government engage in more enforcement in the future, as technology makes it easier to catch and target suspected pirates.
“I think we’ll be seeing more of this,” he said. “This is just the beginning.”
Dotcom had his name legally changed. He was previously known as Kim Schmitz and Kim Tim Jim Vestor. He is founder, former CEO and current chief innovation officer of Megaupload.
The others arrested were Finn Batato, 38, a citizen and resident of Germany, the company’s chief marketing officer; Mathias Ortmann, 40, a citizen of Germany and resident of both Germany and Hong Kong, who is the chief technical officer, co-founder and director; and Bram van der Kolk, aka Bramos, 29, a Dutch citizen and resident of both the Netherlands and New Zealand, who oversees programming.
Still at large are Julius Bencko, 35, a citizen and resident of Slovakia, the site’s graphic designer; Sven Echternach, 39, a citizen and resident of Germany, head of business development; and Andrus Nomm, 32, a citizen of Estonia and resident of both Turkey and Estonia, head of the development software division.
Several sister sites were also shut down, including one dedicated to sharing pornography files.
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