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Megaupload data could be deleted this week (geek.com)
85 points by ukdm on Jan 30, 2012 | hide | past | web | favorite | 40 comments

> The most logical thing to do would be for prosecutors to pay both data hosts using cash from the seized Megaupload bank accounts.

Maybe the most logical, but certainly also the most immoral and illegal. That's basically stealing money - why should Megaupload pay for data hosting if it can't use? As long as it's not ruled illegal by the court, it still has the right to use its money just the way it wants.

Without their permission you're right, but if they sought permission from those accused they might well agree to it, in which case it would no longer be immoral - no idea about legal status, if both the prosecutors and prosecuted want to do it.

Why they would agree to it - if convicted they lose that money anyway, if found not guilty, by paying for the servers now they will still have all their data if they decide to get the site back online and resume business as normal.

I suspect a Judge could just order the data hosts to retain the data, or seize it as evidence through an order to transfer it.

I would guess that would depend where the hosting resides. If the host is non-US then it is out of the courts jurisdiction.

You need to think about the cost to the hosting company. I assume they are holding a lot of data and a large number of servers are tied up doing nothing without payment. They have every right to clean the server and allocate it elsewhere.

If anyone should be footing the bill it should be the prosecutors themselves. They can't take it from MegaUpload. The defense shouldn't pay for it as the data may actually damage their case. You would expect them to be in a stronger position with the proof gone.

You also need to think about the damage to the company. I am sure the prosecutors think they have a slam-dunk but what if they loose? They would have effectively destroyed a multi-million dollar company as a result of a failed prosecution. You could expect a fairly large compensation package in this scenario.

That's the problem with the shoot-first-ask-later approach that they have pursued. I'm positive they did not think this through all possible ramifications and now they are left with a great big mess on their hands.

I think their real goal was to destroy MU. If the case happened to go away in the process, that might even be better, since you wouldn't have to worry about pesky precedence being set. If the government can blame the case going away on somebody else, they might be able to duck any civil consequences in the process (IANAL). They may have thought this through very well.

One reason this may be patently false is that I'm sure Hollywood would love to see people put in jail for copyright infringement.

I, on the other hand believe that officials had to have IT specialists to tell them about the cost to keep the storage running.

The MU takedown was ostensibly justified in terms of seizing evidence. Why would Carpathia and Cogent not be subject to the same process of seizing the storage as evidence?

It very much looks like the seizure process is being used as a directed punitive measure and not merely as an evidence gathering process. We need better laws in the US to protect against seizure being used as non-judiciary, extra-legal punishment.

Such as the 4th amendment? It's really been eroded, it will take a lot to restore it.

Wow, if this is true you could call it a MegaFail by the US Justice Department.

Am I the only one that finds the use of the word ‘Mega Conspiracy’ in the indictment utterly inappropriate and childish?

No you are not, I think the same. Now about letting the files be deleted, this is good and bad, legitimate users will lose their data (obviously bad, but not knowing the rules of the storage I'm not sure), evidence will be destroyed (good for pirates, bad for the prossecution, about the defense I'm not sure)

Only legitimate users who did not keep a local copy of their files will lose their data...

Unfortunately Google cache has stopped serving the MU terms of service, but this link still has them: http://www.scribd.com/doc/78876728/Megaupload-Condiciones-de... and there it says:

"No Warranty

You expressly understand and agree that: (a) your use of the Service is at your sole risk. Megaupload Services are provided on an "as is" and "as available" basis. Megaupload and its suppliers, to the fullest extent permitted by law, disclaim all warranties, including but not limited to warranties of title, fitness for a particular purpose, merchantability and non-infringement of proprietary or third party rights. Megaupload and its suppliers make no warranties about the accuracy, reliability, completeness, or timeliness of our Services, software, or content; (b) Megaupload makes no warranty that (i) the Service will meet your requirements, (ii) the service will be uninterrupted, timely, secure, or error-free,(iii) the results that may be obtained from the use of the service will be accurate or reliable, (iv) the quality of any products, services, information, or other material purchased or obtained by you through the Service will meet your expectations, and (v) any errors in the software will be corrected; ..."

Just becasue something is in the ToS does not make it enforceable or legal, this usually applies when the Terms are sufficiently unfair or too broad, I would not knwo the specifics here but the point remains that just because they details it in the ToS/Terms and Conditions does not make it binding. I am sure that someone who had a premium account (i.e. paid for a service) that lost significant data could pursue a legal claim with a suitably friendly legal team, i.e. happy to take a punt in return for a share fo significant damages.

As if anyone read the ToS.

Agreed, nobody did, but everybody is screaming bloody murder now it seems...

The "conspiracy" language may be related to the RICO charges; if the DOJ can't prove who did what they'll just try to charge everyone with everything under RICO.

"""On the flip side, Kim Dotcom will lose the ability to use the data to defend himself after pleading not guilty to piracy."""

Is it me, or is this saying: "We [the author(s) of the page] don't care if he has any evidence proving he is innocent. We just want to see him in jail"

No, in context of the previous sentence:

> But just as serious, prosecutors will lose valuable evidence with which to prosecute Megaupload’s owners.

they just pointed out that both sides will lose evidence that might help their case.

Surely the prosecutors loose their case if the data goes. Doesn't the defense shift from 'we moderated content, majority was legal' to 'prove that we hosted illegal content'.

With the data deleted isn't it like trying to commit someone of murder after the murder weapon mysteriously vanished?

Yeah, that's sort of what I thought. This "On the flip side, Kim Dotcom will lose the ability to use the data to defend himself after pleading not guilty to piracy," seems very strange to me. Obviously, if the data were to be deleted, it would be because the FBI stopped Megaupload from paying for those data-center services. Thus, we would get a situation where the feds are at least indirectly responsible for destroying evidence, and then argue "well, prove that the data which has just been conveniently destroyed wasn't pirated!" That makes no sense at all, only makes for a stronger defense, so I don't think that's what they're going to try (which is why they had better preserve the damn data).

Perhaps even more importantly, if this data gets destroyed and they can't find further evidence to use against the Megaupload bosses, this would mean a federal bureau effectively destroyed a company without having any evidence of them having committed a crime. That would be a very bad thing, and would set a very, very bad precedent.

It's happened many times before. Anderson Consulting (http://en.wikipedia.org/wiki/Arthur_Andersen), then one of the "Big 5" accounting companies, suffered a "sentence first, verdict afterwords" execution when they were prosecuted for their putative crimes in the Enron debacle.

The reversal by the Supreme Court a few years later was cold comfort to the shell of the company that was left, the 85,000 people it once employed, the partners who lost the value of their holdings in the company, etc.

(And this hysteria lead to Sar-Box, which just happened to be the final nail in the coffin of the traditional IPO startup exit except for a very few massive successes.)

I stand corrected. Unfortunately, this makes it only sadder.

It's a bit strange that they can do that. FBI didn't have a problem grabbing Core IP/Croydon equipment when they investigated the Paypal attacks couple years ago, but here, they somehow can't find some legal justification to force Cogent/Carpathia to keep the data. Isn't it evidence? It pretty much seems like DOJ or whoever wanted to destroy Megaupload and they will have achieved that regardless of how they pursue it. No data, no company, they're still in jail.

Finding it sad the top stories are about the US ruining the internet. Not sure this is what people vote for. How can any government be so opposed to the reasons it was elected in the first place?

If Megaupload were to win the case, get their domain/money/etc. back, would they be able to seek compensation?

I don't know if they have any chance of winning, but if they did I can't imagine their being able to rescue the company - even if they did, they surely wouldn't have a hard time showing how much damage the downtime did to them financially. What options would they have?

Proving the lost costs would be a case of saying we made $Z per day and were off line for Y days, Z*Y= lost revenue. Add to that compensation for lost data for end users plus an arbitrarily large figure for lost "goodwill" in the business and punitive damages. Lawyers are good at this sort of sum as they usually get to stick a few 0's on the end of the figure they come up with.

there is no need to compensate end users for lost data as the MU terms of service explicitly ruled out any such compensation...

Only for MU; not from a third party such as the federal government. The ToS is a private contract between MU and their customers. It is completely inapplicable to any issue between their customers and the federal government.

That said, the users will likely never see a dime because the government's sovereign immunity prevents anyone from suing the federal government over damages relating to law enforcement seizing evidence of a crime.

This immunity is what enables the executive branch of the government to abuse this authority and treat seizure as a form of extra-judicial punishment without going through the courts.

This article is incorrect.


From a Carpathia rep: “In reference to the letter filed by the U.S. Department of Justice with the Eastern District of Virginia on Jan. 27, 2012, Carpathia Hosting does not have, and has never had, access to the content on MegaUpload servers and has no mechanism for returning any content residing on such servers to MegaUpload’s customers. The reference to the Feb. 2, 2012 date in the Department of Justice letter for the deletion of content is not based on any information provided by Carpathia to the U.S. Government. We would recommend that anyone who believes that they have content on MegaUpload servers contact MegaUpload. Please do not contact Carpathia Hosting”

I think they should at least allow users to access their data temporarily. Open up users accounts for downloading only the files that they have personally uploaded for 48 hours and after that they can wipe everything clean.

I would have thought it would be evidence tampering if they did delete the data.

most likely the data hosting companies were not part of the whole DoJ takedown operation, so for them it's basically like any other client who stops payments....

Their hosting bill had to be staggeringly high. I'd hate to be an ISP with all this equipment sidelined, sitting idle, not generating revenue.

It could be high, but if no-one's accessing it, then you have no bandwidth costs. Just turn off the machines, and take out the harddrives, and store them somewhere safe. You now don't have to pay for bandwidth, power or cooling. Could be much cheaper than when they were left on and used.

Thats a good point. Wow imagine how many harddrives they must use, Megaxxxx was huge. Must be a decent % of their revenue gone.

Only if they have a sufficiently flexible bandwidth contract.

I'm not saying that MegaUpload need to pay for this, but more of how the hosting company can not destroy evidence and not have to spend a lot of money.

Only if that data is classified as evidence. From the post it seems like they're working on making that true.

so there's no going back. :(

By doing all this raiding of ptp stuff, you actually harm everybody involved, RIAA doesn't make more money, the freedom index of america shifts down from the 20's to the 40's, net neutrality dies as everyone puts a "This website, button, service, etc is not available to you".

The internet is trying to be transmogrified into fox news, where you can "tune in" to any government authorized channels. If we don't kick and scream to stop this, we'll wake up and the internet will be "one-way", like TV was in the 1960's.

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