By now, most have us have heard about the massive MegaUpload raid in New Zealand brought on by a team of US and international law enforcement that resulted in the arrest of its founder (Kim Dotcom) and high-level employees (but not rapper/”CEO” Swizz Beatz), the shuttering of its website, and the forfeiture of assets belonging to the arrestees including luxury cars and mega televisions. The arrest of Mr. Dotcom was finally able to occur after New Zealand police cut him out of a safe room in his mansion.
Because MegaUpload.com was one of the most trafficked websites in the world, the shock waves have been reverberating around the Internet over the last few days.
The arrests brought on attacks by Anonymous on various websites, including the Justice Department‘s website, causing one blogger to wonder aloud if we lost control of the Internet? I wonder if we ever really had control of it?
The Internet, by virtue of its structure, is decentralized. Because it cross borders and boundaries in seconds (and without needing a passport), there is a distinct lack of control over the Internet (unless you happen to live in North Korea or China). This creates unprecedented opportunity, but there are some who take advantage of the system and trample over well established intellectual property and other rights. In its 72 page indictment, the United States Attorney alleges that Megaupload was designed and operated to do just that.
Whether the US Attorney has made that case is up for debate, but guilt beyond a reasonable doubt is not necessary at this stage. For now, Kim Dotcom (that was not his given name) was denied bail because he was deemed a flight risk. He awaits an extradition hearing.
Essentially, websites like Megaupload have safe harbors if a copyright holder finds that the website is hosting or contains copyrighted works without authorization. It is important for all companies to make sure they have systems in place to fall within those safe harbors. Essentially, with this indictment, the Government is alleging that not only did MegaUpload fall outside of that safe harbor, but it also used the safe harbor to shield itself from nefarious criminal activity. In this instance, MegaUpload (according to the indictment), gave rights holders access to delete file sharing links that they found violated their copyright rights. The copyrighted work, however, remained on MegaUpload’s servers and accessible through other links. While the indictment contains a lot of extraneous information that doesn’t necessarily lead one to conclude that MegaUpload was created to make money off of violating copyrights (such as the lack of a public search function), the facts aimed a proving that allegation will prove to be the most damaging. That, however, can be a difficult road for the government. Ironically, MegaUpload had just recently won a copyright battle (or skirmish) against Universal.
One larger issue: what do we need SOPA for? We will continue to monitor this very interesting situation.