File-sharing site MegaUpload was taken down today. That wasn’t really surprising to me. What was surprising to many was that US and Foreign authorities arrested executives from the company and seized the company’s assets. Many are comparing this reaction to the non-reaction by the US government when Viacom sued YouTube over copyright infringing material.
The simple answer is that the response was different because this was a criminal matter. The long answer requires a look into MegaUpload’s business strategy.
MegaUpload (and many, many sites similar) is a site that allows users to upload files. Each file has a webpage filled with ads that lets another user download the file. The downloader is delayed unless he or she pays for “premium” access. The uploader also gets a cut of the income from the file.
Two factors likely pushed the actions into a criminal matter. First, there doesn’t appear to be a legitimate use to the site. I cannot think of a file that would be so large that I would need to post it to a file locker site such as MegaUpload. Most files can now be sent easily through email. The one exception may be video. Still, the government is claiming evidence shows a majority of the files (as most everyone already knows) were pirated.
Second, by paying uploaders, MegaUpload was encouraging piracy. This is a key difference from YouTube which does allow ads but does not pay for files.
Still, key to the story is knowledge of infringement. Court documents state that they have evidence of knowledge.
Conspiracy theorists may claim this is in retaliation for the dust up with UMG but likely this is a story that became criminal due to the pay to play nature of MegaUpload.
Edit: Direct from the DoJ (http://www.justice.gov/opa/pr/2012/January/12-crm-074.html)
“The indictment states that the conspirators conducted their illegal operation using a business model expressly designed to promote uploading of the most popular copyrighted works for many millions of users to download. The indictment alleges that the site was structured to discourage the vast majority of its users from using Megaupload for long-term or personal storage by automatically deleting content that was not regularly downloaded. The conspirators further allegedly offered a rewards program that would provide users with financial incentives to upload popular content and drive web traffic to the site, often through user-generated websites known as linking sites. The conspirators allegedly paid users whom they specifically knew uploaded infringing content and publicized their links to users throughout the world. “
Update 2: well it appears there were some legitimate uses for MegaUpload that I hadn’t considered such as sharing open-source software such as android roms. Ars Technica has a good run down although I still think it is likely that most content was not legitimate.