Who Needs SOPA? Four Ways to Look at the Megaupload Bust

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In an internationally coordinated strike yesterday, the Department of Justice killed Megaupload, a file-sharing site that the DOJ says accounts for four percent of all Internet traffic and an even more significant amount of the web's IP piracy. Seven employees are charged in the DOJ's indictment, and Megaupload founder Kim Dotcom (ne Schlitz) along with three other employees were arrested in New Zealand. Here are some takeaways from the fall of Megaupload.

1.) The bust undermines the need for the Stop Online Piracy and Protect IP Acts, a case Sam Biddle makes at Gizmodo:

Let's also think about the timing of this bust. It's a pretty spectacular coincidence that the Department of Justice Task Force on Intellectual Property was able to destroy a copyright villain without any help from SOPA or PIPA the day after the internet's giant SOPA protest. Do you hear that, lawmakers? The law, as it stands right now was able to kill Megaupload.com, no draconian censorship powers required. The power you have now—with due process—is achieving the things you say you want to do. Your IP is protected. Online piracy was stopped, except for the dozens of Megaupload rivals like HulkShare and MediaFire. And I wouldn't be surprised if they're next.

2.) While the RIAA (and MPAA) may be losing the PR battle over SOPA and PIPA, the indictment suggests they've got a good charm offensive going within the DOJ. Nate Anderson writes at Ars Technica that certain charges in the Megaupload indictment sound like favors to the recording industry:

It's full of strange non-sequiturs, such as the charge that "on or about November 10, 2011, a member of the Mega Conspiracy made a transfer of $185,000 to further an advertising campaign for Megaupload.com involved a musical recording and a video." So?

The money probably paid for a video that infuriated the RIAA by including major artists who support Megaupload. Megaupload later filed claims in US courts, trying to save the video, which it says was entirely legal, from takedown requests. (The RIAA has long said the site operators "thumb their noses at international laws, all while pocketing significant advertising revenues from trafficking in free, unlicensed copyrighted materials.")

3.) This could be the first indictment of many for file-sharing sites, including the legitimate ones. Ernesto at TorrentFreak points out that Megaupload did not provide a search function for users. For me to find a file, someone first had to post the link in a searchable third party space (forum, blog), or send it to me directly. This is how the majority of file-sharing sites work, including the legit ones. Yet the DOJ claims that Megaupload did this to "conceal the scope of its infringement" (and has internal emails to back up its claim). Who else can they make this claim about?

4.) Law-abiding Megaupload users got screwed, as Ian Paul notes at PC World:

Megaupload users are crying foul after their personal files, not necessarily copyright-infringing material, stored with the file-sharing service was seized on Thursday along with a trove of illegally distributed copyrighted works.

Some of those users took to Twitter complaining about the loss of their files, as first reported by TorrentFreak. "I had files up there…gone forever..and they were personal recordings! No copyright infringement!" said Twitter user J. Amir. Another user complained that her work files were now gone, and others used more colorful language to describe their predicament.

A better strategy is to use services from trusted and well-known companies without any obvious connections to piracy, such as Google Docs, Microsoft's SkyDrive, and Box. Dropbox is also a great choice since it installs a folder on your hard drive with all your content, so if Dropbox were to ever go down you're less likely to lose files.

Keep in mind that when you use these services you also make it easier for the government, and possibly hackers, to peer into your files without your knowledge -- but that's a discussion for another day.

Bottom line: if your cloud service offers file storage on the front end and shows pirated video out the back, don't be surprised if your files vanish one day.

This is why users should start thinking now about what to do when the DOJ comes knocking at the door of their current file-sharing service. Lifehacker has some suggestions.