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One of the the world's biggest content distribution sites -- and oft a piracy tool -- is no longer with us

The U.S. government, still digesting the massive public outcry against the "Stop Online Piracy Act" (SOPA) (H.R. 3261) and "PROTECT IP Act" (PIPA) (S.968), executed what it calls a major anti-piracy operation Thursday afternoon, working with American ISPs to block access to top content upload site, which the government alleges is a source of persistent copyright infringement.

I. RIP Megaupload

Four of the site's seven core admins were arrested by police in New Zealand, in cooperation with their American peers.  According to the most recent report all seven admins have since been taken into custody.

Megaupload was rated the internet's 72nd most used website, and at its peak was the 13th most popular onine property in the world.

The site was founded in Hong Kong by wealthy entrepeneur Kim Schmitz (aka "Kim Dotcom), a German expatriate with a flare for controversy (and in his earlier days insider trading and hacking).  Kim Dotcom reportedly was living in a NZ$30M ($24.08M USD) outside of Auckland, New Zealand, living a cozy existence under the psedunonym "Kim Tim Jim Vestor" and sporting a fake Finnish passport.

Part of the so-called "Megaworld" franchise, Megaupload offered 200 GB of storage space to users for free.  This allowed users to share content with each other.  The only downside from a convenience perspective was that sharing worked through a queue system.  Buying a paid account removed the queueing system and its annoyances, allowing you to upload and pass direct links to your friends.

MegaUpload is no more. [Images Source: MegaUpload via Venture Beat]

The site's easy to use model earned it "more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet" according to the U.S. Department of Justice's (DOJ's) complaint filed against the site and its administrators

II. Feds Kill MegaUpload Abruptly, Arrest It's New Zealand Admins

The DOJ accuses Megaupload of acting as the internet's mixtape site and engaging in massive scale copyright violation.  While Megaworld's user policy states that it does not condone infringement and complies with Digital Millenium Copyright Act (DMCA) takedowns from the U.S. federal government for users found to be infringing content, the DOJ argues that the site was support criminality.

It points to $175M USD in property -- including 15 Mercedes, a Maserati, a Lamborghini, a Rolls-Royce with the license plate "GOD" -- that it seized during its raids on the suspects' property.  The DOJ claims that Megaupload masterminded the theft of over $500M USD in copyright work.

The inviduals arrested during the raid, according to the indictment, are:
• Finn Batato, 38, a citizen and resident of Germany, MegaWorld's chief marketing officer;
• Julius Bencko, 35, a Slovakian national who is the graphic designer;
• Sven Echternach, 39, a citizen and resident of Germany, who is the head of business development;
• Mathias Ortmann, 40, the company's chief technical officer, co-founder and director; who previously split his time between Hong Kong and Germany, his native home.
• Andrus Nomm, 32, a megaworld Estonian software programmer and head of the development software division;
• Bram van der Kolk, aka Bramos, 29, a Netherlands native who assisted in programming and network engineers consultant for Mega conspiracy websites.

Again, the site was for profit and insists that it had gone legit and was not supporting piracy.

UMG was particuarly peeved when several of its artists including Kanye West, Will.I.Am, Jamie Foxx, Sean "Diddy" Combs, Alicia Keys, Chris Brown -- performed a video plugging the site -- titled "The MegaUpload Song":  

The UMG briefly suceeded in convincing sites like Google Inc.'s (GOOG) YouTube into false takedowns, but when Megaupload produced documents indicating that the artists all legally agreed to make the song, the track was restated to UMG chagrin.

The DOJ's press release can be found here.  The full complaint can be found here [PDF].  

The DOJ appears to have sided with the irrate UMG in punishing MegaUpload.  It justifies the seizure of $50M USD worth of server electronics in Ashburn, Virg.; Washington, D.C.; the Netherlands; and Canada, by claiming Megaupload's linking system inherently encouraged piracy.  It also accuses Megaupload of failing to process takedown requests on users found to be pirating.

III. Counterstrike

In response to the takedowns and arrests, worldwide internet "hacktivist" collective Anonymous blasted the DOJ, Universal Music Group (a property of Vivendi SpA (EPA:VIV)), and the Recording Industry Association of America, and the Motion Picture Association of America's websites with distributed denial of service attacks, taking them down, temporarily.  

As of 10:00 p.m. EST, these attacks had almost completely subsided allowing normal access to the targeted sites.  Megaupload, on the other hand, remains quite dead.

Some members of the group-without-a-leader posted a message on the Twitter account @YourAnonNews, stating, "The government takes down #Megaupload? 15 minutes later #Anonymous takes down government & record label sites. #ExpectUs."

One of @YourAnonNews' posts even claimed to have downed the U.S. Federal Bureau of Investigations page.  This claim was unable to be verified.  If it did go down, it only went down briefly, as it was fully functional for most of the evening.

A member of Anonymous writes on the Twitter account, "The Internet is here. Are you ready for The Year of Cyber War? We are. Rise up and join us to fight for your rights."

To be clear, Anonymous's retailiatory DDoS attacks have nothing directly to do with the SOPA/PIPA protests, though numerous members of the group did also support those efforts.

Developing story...

Sources: Twitter, U.S. DOJ

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More will follow
By Beenthere on 1/20/2012 12:00:30 AM , Rating: -1
There will be many more take-downs. While authorities will never stop piracy or facilitation of piracy, they will make those who violate law pay for their choices.

Hacking the DOJ website hardly qualifies as anything of value other than to just motivate law enforcement to convict the hackers.

RE: More will follow
By CityZen on 1/20/2012 12:22:00 AM , Rating: 2
There will be SOME more take-downs. While authorities will never EVER stop piracy or facilitation of piracy, they will make A FEW OF those who violate law pay for their choices.

There, fixed it for you

RE: More will follow
By geddarkstorm on 1/20/2012 1:16:27 AM , Rating: 3
What about Mediafire, Dropbox, Google, and all the other sites that allow you to upload something and share a link? Is the government going to take down the entire internet Cloud, the very thing so many companies and cell phone systems are pushing for? Because, all of it can be used for facilitation of piracy.

RE: More will follow
By seamonkey79 on 1/20/2012 7:11:36 AM , Rating: 3
I wouldn't be surprised if that was the goal of the product companies, because that way we would be forced back into the only method of business they know, limiting musical choice and making it really expensive for you to get it. They will never have those days back, but I'm sure they think if they get rid of the internet, they will.

RE: More will follow
By Shadowmaster625 on 1/20/2012 9:57:26 AM , Rating: 2
Yes, they will try to take them all down. When they are done what is left will just be google, facebook, amazon, etc. Welcome to Internet 2.0

RE: More will follow
By Reclaimer77 on 1/20/2012 9:33:05 AM , Rating: 1
Is anyone else afraid that these guys are going to push Governments so far, that we'll end up having way LESS rights from the resulting legal backlash that will surely follow? That these hacks will be cited as reasons for needing more "sweeping and comprehensive" legislation on the Internet to fight these "terrorists" etc etc?

I know I am...

RE: More will follow
By tecknurd on 1/21/2012 6:24:49 PM , Rating: 2
I am afraid of the hackers that do criminal acts. The Open Act includes Internet police, but the hackers are unfortunately be one step ahead of the Internet police. Piracy actually already costs me money and costs me problems to watch movies. For some applications, I am afraid of installing them because reputable companies puts in spyware in their applications, so one program copy can only be used at time on a network. It was not like this 15 years ago. It is not unfair for companies to treat me as a criminal because buying my copy of a movie and buying applications. This is happening because of people being inconsiderate and disrespectful by pirating.

"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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