Category Archives: Cyberlockers

MegaUpload Shut Down by the Feds, Founder Arrested

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MegaUpload, one of the largest file-sharing sites on the Internet, has been shut down by federal prosecutors in Virginia. The site’s founder Kim Dotcom and three others were arrested by the police in New Zealand at the request of US authorities. MegaVideo, the streaming site belonging to same company, and a total of 18 domains connected to the Mega company were seized and datacenters in three countries raided.

Just a few weeks ago, MegaUpload founder Kim Dotcom told us that his Mega venturesImage is Loading.... have nothing to worry about, as they operate within the rules of the law.

“Mega has nothing to fear. Our business is legitimate and protected by the DMCA and similar laws around the world. We work with the best lawyers and play by the rules.

“We take our legal obligations seriously. Mega’s war chest is full and we have strong supporters backing us,” Dotcom said.

But behind the scenes powerful forces were at work, plotting the forceful demise of MegaUpload, one of the world’s biggest websites.

An indictment unsealed today by the Department of Justice claims that MegaUpload has caused the entertainment industries more than $500 million in lost revenue and generated $175 million “in criminal proceeds.”

Two corporations – Megaupload Limited and Vestor Limited – were indicted by a grand jury in the Eastern District of Virginia on January 5th, 2012, and charged with “engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.”

Today, the authorities executed in excess of 20 search warrants in the United States and eight other countries.

Data centers in the Netherlands, Canada and Washington housing MegaUpload’s equipment were raided. In an apparent reference to the latter location, a source has just informed us that the FBI are currently detaining everyone at the ISP Cogent Communications’ headquarters in Washington DC, in connection with a Mega-related search warrant.

In addition to MegaUpload founder Kim Dotcom who was arrested today in New Zealand, another six alleged members of the Mega “conspiracy” were charged in the indictment:

- Finn Batato, 38, Mega’s chief marketing officer and a citizen and resident of Germany
- Julius Bencko, 35, Mega’s graphic designer from Slovakia
- Sven Echternach, 39,Mega’s German head of business development;
- Mathias Ortmann, 40, the German CTO, co-founder and director of Mega
- Andrus Nomm, 32, programmer and head of the development from Estonia
- Bram van der Kolk, 29, a Dutch citizen who oversaw programming and network issues.

Dotcom, Batato, Ortmann and van der Kolk were arrested today in Auckland, New Zealand, by authorities there. Bencko, Echternach and Nomm are still at large.

The authorities seized approximately $50 million in assets, which appears to include Kim Dotcom’s treasured collection of several dozen cars, as detailed below.

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A total of 18 Mega-related domains were also seized by authorities including Megastuff.co, Megaworld.com, Megaclicks.co, Megastuff.info, Megaclicks.org, Megaworld.mobi, Megastuff.org, Megaclick.us, Mageclick.com, HDmegaporn.com, Megavkdeo.com, Megaupload.com, Megaupload.org, Megarotic.com, Megaclick.com, Megavideo.com, Megavideoclips.com and Megaporn.com.

According to the Department of Justice, the individuals named in the indictment face a maximum penalty of 20 years in prison on the charge of conspiracy to commit racketeering, five years in prison on the charge of conspiracy to commit copyright infringement, 20 years in prison on the charge of conspiracy to commit money laundering and five years in prison on each of the substantive charges of criminal copyright infringement.

The legal action against Mega will set a precedent for similar cloud-hosting services. The MegaUpload site itself had no search function to discover content directly, but according to the indictment this was done to “conceal the scope of its infringement.” Would the same be true for services such as Dropbox?

 

 

Megaupload Targeted In Multi Million Dollar Lawsuit

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Adult media company Perfect 10 has come out all guns blazing in yet another lawsuit adventure. This time it has targeted cyberlocker Megaupload, with claims that the file-hosting giant infringed its copyrights, infringed and damaged its trademarks, and engaged in unfair competition. Perfect 10 demands a jury trial and damages and costs running to millions of dollars.

Image is Loading....Another month, another copyright lawsuit from adult media outfit Perfect 10. This time the company is chasing file-hosting service Megaupload and its owner Kim Schmitz, associated companies such as megarotic.com, megaporn.com, megavideo.com, and megaclick.com, and other businesses and affiliates.

Does 1 to 100 in the lawsuit, which was filed 31st January in the California Southern District Court, are described as businesses owned, controlled by, or affiliated with Megaupload “which either directly or indirectly profit from and/or directly or indirectly infringe or facilitate the infringement of Perfect 10 intellectual property.”

The complaint states that Schmitz created MegaUpload for the specific purpose of storing, displaying and distributing intellectual property owned by others including “billions of dollars of pirated full-length movies, songs, software, and images.” It adds that Megaupload is not registered to do business in the United States and pays no US taxes.

Through its rewards program, which Perfect 10 claims offers $10,000 USD for 5,000,000 reward points, Megaupload “induces its customers to post content that is likely to be massively downloaded, such as high quality infringing nude images and popular full length movies and songs.”

Furthermore, Perfect 10 believe that Megaupload does not deserve ‘safe-harbor’ under the DMCA.

“Pirate websites such as megaupload.com, which obviously infringe massive quantities of movies, songs, images, and other extremely valuable copyrighted works, and directly profit from the infringing activity over which they have complete control, were never meant to be eligible to receive a DMCA safe harbor,” states the lawsuit.

“Furthermore, none of the five Megaupload websites listed above, including megaupload.com, identify the name, address, or phone number of their respective DMCA agents as required by 17 U.S.C. § 512(c)(2).”

Nevertheless, Perfect 10 says it sent Megaupload 22 notices in July and August 2010 informing the file-hoster “that it was infringing a vast collection of third party copyright works, Perfect 10 rights of publicity, and Perfect 10 copyrighted works.” Perfect 10 states that “as far as it can determine” most of the works have not been removed.

This has led the company to sue Megaupload for direct, contributory and vicarious infringement of “tens of thousands” of its images. Among other claims, Perfect 10 states that Megaupload also infringed and damaged its trademarks and became a source of unfair competition.

Perfect 10 is demanding that all defendants cease the unlawful copying, distribution and displaying of its copyright works and the same be deleted along with any links to such material between the defendants’ websites and their affiliates.

Damages of at least $5 million are claimed, plus punitive damages, attorney’s fees and full costs.

In 2009, Perfect 10 filed a lawsuit against the leading file-hosting service, RapidShare. Among other claims, Perfect 10’s complaint stated that RapidShare was guilty of infringing the copyrights of many of its images. In May 2010, the District Court of California ruled that RapidShare was not guilty of copyright infringement. RapidShare went on to countersue Perfect 10 “for being a copyright troll.”

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How ‘Cyberlockers’ Became The Biggest Problem In Piracy

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Since Napster exploded into the public consciousness when it was founded 12 years ago, the world of digital piracy has been associated with a particular type of software—“peer-to-peer” download services. (Sometimes fairly, sometimes not.) Either way, 2011 is likely to be the year when P2P is finally eclipsed by “cyberlockers,” a wildly popular type of site that many in the entertainment industry see as a new threat that could be even bigger than P2P. So what are cyberlockers, anyway? Why are they so popular—and so alarming to those who fight against piracy?

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MegaUpload Accuses ISP of Restricting Access To Its Services

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Cyberlockers are the new fall guys for the entertainment industry it seems, as yet more news comes in of action being taken against MegaUpload, one of the largest one-click download sites. According to reports from users and the site itself, MegaUpload is being blocked or slowed down by Orange, one of the major ISPs in France. MegaUpload has publicly outed the ISP, that on its turn denies all accusations.

Cyberlockers are becoming increasingly popular and may have overtaken torrents as the file-share medium of choice. Of course, this hasn’t gone unnoticed by the entertainment industry who have labeled such sites as rogue piracy havens.

While RapidShare has gone on the offensive, describing claims in anti-piracy-funded studies as ‘defamation’, MegaUpload has been more direct. A few days ago the company responded to accusations the RIAA and MPAA made about the facilitation of copyright infringement, calling them “grotesquely overblown allegations.”

While all of this was going on a separate conflict was brewing in France, between MegaUpload and France Telecom, specifically the Orange subsidiary.

MegaUpload has claimed that Orange has been substantially slowing down, or blocking access to its servers. Presumably these actions were taken in an attempt to discourage people from using the service, a claim Orange denies.

Accusations and claims have been flying back and forth for the past few days, including a banner run by Megaupload this week which suggested that Orange subscribers call up and cancel their subscriptions, in favour of ISPs with better peering.

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The full text is (translated from French)

Slow Downloads? Video playback is hesitant?
It is likely that your Internet provider is intentionally restricting your access to significant portions of the Internet! Our claims statistics show that most users who have this problem are accessing the Internet via France Telecom, often under the Orange brand (also “Ya” in Spain).

If you are concerned, please call Orange customer service on 3900 and tell them that you can not connect to sites hosted on Cogent and TATA. Also tell them that you are considering moving to an Internet provider with an excellent global connectivity, such as Iliad or SFR (free.fr, Alice). If you’re impatient and you need a good service immediately, consider changing your supplier for one of them, and be sure to tell Orange the reason for your decision to terminate your line!

In a telephone press conference last Thursday, Orange hit back at MegaUpload. The ISP stated that it follows the Net Neutrality rules as laid down by the communications regulation body ARCEP. Instead, the ISP argued that MegaUpload’s users are the victims of ‘a low-cost business model,’ where the cyberlocker signs cheap peering contracts that lead to the slow downloads.

Orange further noted that it takes no responsibility for the situation, and that MegaUpload should improve their infrastructure as other French ISP’s have had the same kinds of problems with MegaVideo/MegaUpload at times. They also added that although difficult, MegaUpload needs to find a balance between quality and economic performance.

While some might suggest it’s a battle between peering companies, there may well be more to it, which will bring the focus on ARCEP’s 4 month old net neutrality guidelines for France. It’s clear however, that this battle of wills is just heating up. Especially when (or if) the likes of HADOPI get involved, the new anti-piracy law which ironically doesn’t affect users of cyberlockers.

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