
Why the feds smashed Megaupload - evo_9
http://arstechnica.com/tech-policy/news/2012/01/why-the-feds-smashed-megaupload.ars
======
nostromo
What's clear now thanks to this whole affair is that PIPA and SOPA are
completely unnecessary. Megaupload is the stated target of those bills. Here
we are, with no new laws passed, seeing infringers charged and domains taken
offline.

Why isn't the media playing up this angle more? It writes itself.

~~~
rickmb
It's a classic move.

Yes, people will start claiming PIPA and SOPA are unnecessary, and they may be
taken of the table. Hurray!

Of course, this now means that _much of the evil stuff in PIPA and SOPA is
already reality_ , but instead of being angry about it, we're now breathing a
sigh of relief.

In the mean time, the feds will start taking down sites left, right and
center, and across the globe, without any form of due process. And we'll be
cool with it, because things could have been so much worse with PIPA and
SOPA...

We're not seeing "infringers charged" here. Megaupload is _gone_. The
entertainment industry has been playing judge and jury, with the feds as their
executioners, and the justice department giving it a thin veneer of legal
process.

PIPA and SOPA are more of less a reality without the laws actually being
passed. That in itself is way scarier than the actual content of those laws.
And thanks to this wonderful sleight of hand, it will now be perceived _as if
it were a good thing_.

Maybe not yet checkmate, but definitely: check.

~~~
Iv
That is why everyone point at victory in the SOPA fight, I say that there
won't be victory unless a constitutional amendment protects our rights and we
don't have to take arms against a new law every year.

~~~
adestefan
What rights are not being protected? Protecting copyright is about the only
thing the Constitution directly calls out as the duty of the government.

~~~
kbolino
The actual wording (annotations mine):

"The Congress shall have Power (1)... To promote the Progress of Science and
useful Arts (2), by securing for limited Times (3) to Authors and Inventors
(4) the exclusive Right (5) to their respective Writings and Discoveries (6)"
(Article I, Section 8)

(1) This is a grant of power, not a mandate. Congress may exercise it, but is
not compelled to do so.

(2) The goal is for the public benefit, not for private gain. It is meant to
advance our knowledge and culture, not provide a permanent rent-seeking
scheme.

(3) There is nothing "limited" about "life of author + 70 years"; the life of
the author is technically indefinite, and furthermore 70 years is on the order
of a person's life expectancy. The original term of copyright in this country
was 14 years from date of publication.

(4) In no way is this protection afforded to publishers, producers,
distributors, or other people whose contribution to the work is laborious but
not novel. Novelty is subject to protection, not labor.

(5) Nowhere is there a requirement for violations of this "exclusive Right" to
be crimes; nor is the government charged with enforcement of it. Copyright was
meant to be a civil, not criminal, matter.

(6) The recording of a musical production or motion picture is not a "writing
or discovery" and is thus not technically subject to these protections to
begin with.

As I understand it, all of these limitations have been overridden by various
treaties signed by the United States. Nevertheless, if you're going to use the
Constitution as the source of your argument, it's best to know that what we
have and what was intended are two drastically different things.

------
nextparadigms
What's really surprising about all this, besides the very strange and bogus
charges, is how they are handling this. They are going after "copyright
infringers" like they are some kind of drug cartel leaders.

It's really amazing how things have changed at the top regarding copyright
infringement, that they treat copyright infringers as some of the most wanted
criminals. What's next? Sending the drones after them? Giving the chair to the
Megaupload or ThePirateBay's founders? It's becoming really ridiculous.

~~~
drivebyacct2
>They are going after "copyright infringers" like they are some kind of drug
cartel leaders.

And thus far they're about as effective at impeding my access to copyrighted
content as they are impeding my access to illegal drugs. Fortunately trying to
limit access to copyrighted material doesn't drive people's money to possibly
terrorist organizations, but that's another issue.

~~~
bermanoid
_And thus far they're about as effective at impeding my access to copyrighted
content as they are impeding my access to illegal drugs._

Seriously:

1) Google "watch 30 rock online"

2) Click first link

3) Click "Search links" for newest episode of 30 rock

4) Go to second to last page of results (just because the first and last page
of results are always fake, as a rule - you always shoot for the middle)

5) Click random link

6) Watch Dove Soap ad

7) Watch tonight's episode of 30 Rock

Replace "30 rock" with pretty much any other TV show (at least one that's been
over for more than 30 minutes) or movie, and the same approach will get you to
a working video, though you may have to click a few fake links before finding
a real one.

Is there a solution to this? Idunno. I do know that the "overseas" thing is a
total red herring - in this particular example, that "first link" that I
clicked was sidereel.com, registered to the Rovi Corporation in Santa Clara,
CA. Completely and utterly within the jurisdiction of the US government, and
clearly linking to pirated versions of almost every TV show that's on the air
right now, and pretty much nothing else. If linking to content was such a
clear and easily prosecutable crime, I'd think they'd be taking down sites
like that, too, rather than leaving them active.

I can't help but wonder if perhaps there's not such a legal consensus on how
criminal sites like Sidereel are, and that's why they're trying to go after
the endpoints that sites like this point to instead, as well as passing laws
that would specifically make linking to them illegal.

~~~
leoedin
The British admin of TVShack (which was shut down a while ago) is currently
going through the UK courts facing extradition to the US[1]. The founder of
NinjaVideo was sentenced to 22 months in jail[2].

However, none of these people were actually found guilty. Ninjavideo was a
plea deal, and the TVShack guy hasn't faced trial yet.

Interestingly for the TVShack case, a similar website was found to not be
distributing TV shows in the UK in 2010[3]. Despite this, the first ruling was
for the extradition of the TVShack admin.

[1]: [http://www.guardian.co.uk/law/2012/jan/13/tvshack-student-
fo...](http://www.guardian.co.uk/law/2012/jan/13/tvshack-student-founder-
extradition?newsfeed=true)

[2]:[http://arstechnica.com/tech-policy/news/2012/01/facebook-
pos...](http://arstechnica.com/tech-policy/news/2012/01/facebook-posts-show-
lack-of-remorse-so-ninjavideo-leader-is-in-jail.ars)

[3]<http://gigaom.com/video/tv-links-wins-in-court/>

------
paul9290
What confuses me even more is they applied US laws to those who live outside
the US?

So the law of America and desires of the copyright cartel trump every other
country's laws?

Overall this seems like a big orchestrated F U to the opponents of SOPA (the
Internet).

Really if they provided us, what we all are screaming for - better access and
selection to their product on the Internet, MegaUpload and future services
wouldn't be a concern. Ridiculous!

Updated: Further some of those behind MegaUpload are artist's of the RIAA.....

~~~
pauldmartin
Not to mention megaupload has filed lawsuits in US courts...

~~~
nitrogen
That's because Universal is in the US. Should filing a lawsuit against a US
company subject the plaintiff to US jurisdiction in unrelated matters?

------
guard-of-terra
"They had not one but three Samsung 83" TVs, and two Sharp 108" TVs. Someone
owned a "Predator statue." Motor bikes, jet skis, artwork"

The list is awesome. They probably compiled very similar lists in 1917 in
Russia about the possessions of capitalist pigs: the lists justified
expropriating the listed grossly excessive goods into hands of workers and
peasants.

That's what the article implies: they were too thick and therefore got
expropriated. _Raskulachili_!

~~~
Kadin
That's pretty much the situation. But I think the lesson is the other way
around: if you make $150M and don't share it with the fatcats in Washington
through some strategic campaign contributions to protect your business model,
prepare to have some Federal Acronym Agency come busting down your door.

If Megaupload had played ball and used some of that cash to buy a few
Representatives and maybe a Senator or two, they'd probably be fine.

That's how business works today.

------
JBiserkov
How not to die if your business model is (borderline) illegal:

-delete your chat logs and email -don't have sensitive(incriminating, personal) information in logs at all (see 37sig story) -don't use your own (illegal) product -"outsource" the code to a "separate" entity, obfuscate it, claim ignorance and trade secret -donate to senators, judges, prosecutors, presidents

All pretty obvious, I'm sure you can think of more, if your Mazerati depends
on it.

------
charliesome
> _and they claim that Megaupload purposely offers no site-wide search engine
> as a way of concealing what people are storing and sharing through the
> site._

So if my site doesn't have a search engine, I'm at risk of being seen as
purposely concealing what my users are doing?

~~~
oliciv
And if it does, you're making it easier for people to find copyrighted
material

------
lani
The first paragraph makes it very clear. The case is against people who have
expensive cars and big television sets.

~~~
nekojima
Finally the DOJ is launching a case against someone in the top 1%!! Perhaps
they didn't buy (aka donate to) enough Congressmen & Senators to protect
themselves... :-)

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thomasjoulin
For me, there is a big difference between what I considered a garbage site
like Mega Upload, and a site like The Pirate Bay. The first paragraph of this
article is appalling. While I won't be surprised that TPB owners make a lot of
money, the description of the cars, the aliases, looks like mafia guys coming
from movies. TPB stands for civil liberties, right of sharing stuff like
Wikileaks files in addition to Hollywood movies... I don't know, I may be
wrong, but I won't miss Megaupload.

~~~
roel_v
"TPB stands for civil liberties"

...seriously? Because the Wikileaks files wouldn't have made it out into the
world without the pirate bay? Please.

~~~
thomasjoulin
I didn't say "Only TBP stands for civil liberties". But they do have a
philosophy (and are willing to make a point more than make tons of cash and
spend it in yachts and funny car plates), which is a big difference with what
Kim "Dotcom" is showing... Which explains why I won't miss his site (or him)

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JulianMiller520
"Even the graphic designer, 35-year-old Slovakian resident Julius Bencko, made
more than $1 million in 2010 alone." ugh what a disgusting comment as though
graphic designers shouldn't be paid for their work regardless of the status of
the company.

------
nitrogen
So I guess their indie music distribution site, MegaBox, isn't going to be
released after all.

And what does their choice of license plate have to do with their guilt or
innocence, anyway?

~~~
firefoxman1
It doesn't; just makes for better journalism I guess.

------
guelo
It has been apparent for a while now that Obama's DOJ takes orders from the
MPAA.

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koevet
And how about filesonic.com, hotfile.com, fileserve.com, wupload.com and
hundreds of other sites that follows the same megaupload model?

~~~
JumpCrisscross
I think the salience of the article is in how Megaupload became conspicuous
after their ad campaign. That made them a focal point of the entertainment
industry's wrath.

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albb0920
I'm confused, if "knowledge of infringing material and do nothing about it"
cause you have no safe harbor. Any big content site like YouTube must know
some of it's users are abusing the service, but they're more likely to handle
it after there's complain. Or how can you tell whether a file is copyright
infringement or not? censoring all uploads, non sense.

~~~
sbov
Huge difference between knowing there's some infringing content somewhere
versus reviewing, rewarding, and noting an uploader because of "10+ Full
popular DVD rips (split files), a few small porn movies, some software with
keygenerators (warez)." Censoring all uploads is hyperbole.

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sabret00the
I really didn't know that ARS partook in smear campaigns like this. This is so
utterly one sided that it's disappointing. Simple fact of the matter is,
copyright holders could use an abuse tool to remove content and had said
content removed.

I mean, they arrested the graphic designer!...

------
narkee
In order for the MPAA/RIAA claim that copyright infringement causes large
monetary damages to ring true, we must see profits increase in these
industries.

If profits do not increase, then Megaupload did not impact profits.

~~~
mc32
Not necessarily. There are long term trends, cyclical trends, write-offs, etc.
I don't see how one can look at a single indicator, profits, and then have
insight into detail. It's a rather tenuous assertion.

~~~
BiosElement
Tell that to the MPAA then next time they claim piracy is hurting their
business. :)

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GigabyteCoin
I still don't get it. Why couldn't the same be done to thepiratebay? Because
the FBI can't access their internal emails? That's it?

If I recall, the pirate bay "thumb their noses at international laws, all
while pocketing significant advertising revenues from trafficking in free,
unlicensed copyrighted materials." as well.

~~~
rimantas
I don't think that FBI acting in Sweden would be perceived in any positive
light…

~~~
GigabyteCoin
Oh ok then, so the ONLY thing that Megaupload did wrong was having file
servers inside the United States?

~~~
BiosElement
And were clearly not as well prepared as the TPB crew.

------
GBKS
Wouldn't this action only be valid if MegaUpload was only used for illegal
activity? Obviously, there were copyrighted files, but I am pretty sure (and
as somebody else mentioned) there was also plenty of legal activity. This
legal side of the business was also destroyed, which does or seem legal.

------
Mordor
'piracy' is about control and the failure of the media industry to manage
their product. Megaupload's only crime is to be outside of that control. I
just don't understand why the media industry makes a product it can't control
- perhaps they should be making something else?

~~~
jonhendry
And, what, stop making music or movies or TV shows?

That's heartless. What about the millions of people who have decided they are
entitled to free entertainment for life? What are _they_ going to do with all
that free time that they won't be spending in front of a TV stuffing their
faces with cheetos? They'll be lost, adrift!

~~~
Mordor
Lol - maybe a different business model would result in a better product?

------
a9
Megaupload had servers in the USA with Carpathia Hosting. That makes them
subject to US law. SOPA/PIPA are aimed at situations where the servers are all
offshore and the business has no connection to the US.

------
jean_valjean
When I read the details of the story, I feel like this isn't meaningfully
different from a few years back when there'd be warehouses of DVDs or VHS
tapes,and hundreds of duplicators seized along with bags of cash.

The medium change, but the crime appears to have remained essentially the
same.

There were two interesting things to me:

1) the email from Kimble to PayPal where he was clearly trying to cut off
PayPal to his competitors whilst keeping it for himself; trying to convince
PayPal that they shouldn't do business with those other guys.

2) the type of evidence they have makes me wonder if it was an inside job, or
perhaps even a setup by a competitor who hacked into their systems. It doesn't
feel like a case the FBI would pick up without a strong bootstrap.

~~~
BiosElement
You mean besides the MPAA/RIAA bribes?

------
o2sd
Actually, this article reads like a play book for the next group who wants to
create 'MegaUpload2'. 1) Secure your servers 2) Encrypt your email 3) Keep a
low profile 4) Hide your identity 5) etc

