Tag Archives: Megaupload

The Megaupload case (updated)

Posted on by at 7:14 am

I am sure you heard that late this week the United States Department of Justice, with the cooperation of New Zealand authorities, shut down a very popular site called Megaupload. Megaupload was a “file locker” site, a category of cloud based service providers that allow users to upload files to the site for easy Internet access on multiple devices later. This type of site is not rare and includes sites like box.net, DropBox, Facebook and YouTube.

The DOJ claims that the operators of Megaupload paid users to upload copyrighted media for distribution to other Megaupload users, and that such uploads cost the media industry damages in excess of $500 Million.

But there are at least two important questions raised by the DOJ action. First, if the government is able to shut down a site unilaterally and without a prior judicial hearing why in the world is either SOPA or POPA necessary.  The law enforcement shutdown provided no opportunities for due process whatsoever, and immediately rendered inaccessible presumably thousands or hundreds of thousands of files uploaded by innocent users and stored on Megaupload that contained no intellectual property whatsoever. Were those users not entitled to a hearing before their data was seized?

Second, what stops government seizures of any sites that store user uploaded content?  Keep in mind that this type of situation is purely financial in that there were no claims of injury or possible injury to individuals. No violence was involved. If there is a claim that Party A stole and sold the property of Party B, isn’t that claim heard in court?

This action demonstrates quite clearly the dangers of legislation like SOPA. But it also shows that law enforcement acts precipitously in commercial disputes if they occur on the Internet. If I were YouTube, Dropbox or the others, I would be very concerned.

Robert Bennett has been hired to represent Megaupload, so it is likely that a strong defense will be mounted.

Update: Glenn Greenwald, writing at Salon, has much more on this point. Worth a full read.

… the U.S. Justice Department not only indicted the owners of one of the world’s largest websites, the file-sharing site Megaupload, but also seized and shut down that site, and also seized or froze millions of dollars of its assets — all based on the unproved accusations, set forth in an indictment, that the site deliberately aided copyright infringement.

In other words, many SOPA opponents were confused and even shocked when they learned that the very power they feared the most in that bill — the power of the U.S. Government to seize and shut down websites based solely on accusations, with no trial — is a power the U.S. Government already possesses and, obviously, is willing and able to exercise even against the world’s largest sites (they have this power thanks to the the 2008  PRO-IP Act pushed by the same industry servants in Congress behind SOPA as well as by forfeiture laws used to seize the property of accused-but-not-convicted drug dealers).

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The U.S. really is a society that simply no longer believes in due process: once the defining feature of American freedom that is now scorned as some sort of fringe, radical, academic doctrine. That is not hyperbole. Supporters of both political parties endorse, or at least tolerate, all manner of government punishment without so much as the pretense of a trial, based solely on government accusation: imprisonment for life, renditions to other countries, even assassinations of their fellow citizens. Simply uttering the word Terrorist, without proving it, is sufficient. And now here is Megaupload being completely destroyed — its website shuttered, its assets seized, ongoing business rendered impossible — based solely on the unproven accusation of Piracy.

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