Megaupload, one of the largest file-sharing services on the Internet, has been shut down by federal prosecutors on charges that it systematically abetted widespread piracy of copyrighted music, movies, video and other intellectual property.
Just
a day after a 24-hour blackout of popular Websites such as
Wikipedia,
Reddit and
BoingBoing, which were
protesting a pair of controversial anti-piracy bills making their way through
Congress, federal law enforcement stepped in and shut down one of the world's
largest file-sharing sites.
The
72-page indictment, unsealed Jan. 19, accuses seven individuals and two
corporations, Megaupload Limited and Vestor Limited, of costing copyright
holders more than $500 million in lost revenue from pirated movies and other
content. The individuals face a maximum penalty of 20 years in prison on
racketeering charges, five years for conspiracy to commit copyright
infringement, 20 years on money laundering charges and five years on related
charges.
The
activist hacker collective Anonymous and allies
were
swift to launch distributed denial-of-service attacks in retaliation for
the indictments and the takedown of the Megaupload site, blacking out a number
of U.S. government and industry Websites. The sites-including the FBI, U.S.
Department of Justice, U.S. Copyright Office and several entertainment giants,
including Universal Music, Recording Industry Association of America and Motion
Picture Association of America-were knocked offline Jan. 19 and remained unavailable
for the remainder of the day and evening.
An
online "locker" service, Megaupload allowed users to anonymously
transfer large files by uploading them to the company servers and share the
content via a unique URL. The indictment claims movies, television programs,
music, ebooks and software were distributed through Megaupload's network of
sites. The company allegedly made $175 million through ads that appeared on the
site as well as by selling premium subscriptions to users, according to the
Megaupload
indictment, a copy of which is now available on Scribd.com.
"This
action is among the largest criminal copyright cases ever brought by the United
States,"
the Justice
Department said in a statement about the indictment.
Authorities
executed more than 20 search warrants in the United States and in eight other
countries to shut down the site. Law enforcement has seized a number of servers
and 18 domain names, including megaupload.com, used by Megaupload to operate
the file-sharing services. The servers were located in the United States,
Canada and the Netherlands.
Four
of the seven people, including the site's founder, Kim Dotcom, formerly Kim
Schmitz, have been arrested in New Zealand, the authorities said. The
indictment claims Megaupload was the 13th most popular Website in the world.
Kim Dotcom allegedly made more than $42 million in 2010 alone, according to court
papers.
Federal
prosecutors called the group "an international organized criminal
enterprise allegedly responsible for massive worldwide online piracy."
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