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Mega data hangs in the balance

By | Published on Monday 16 April 2012


The future of the legitimate files stored on the shut down MegaUpload servers is still hanging in the balance after the judge overseeing a court hearing on the matter last week called on all interested parties to try and reach a mutually acceptable compromise.

As previously reported, when the US authorities shut down the MegaUpload enterprise in January as they swooped on the controversial file-transfer company and its executives, as well as blocking consumer access to large amounts of unlicensed content, they also stopped those using Mega’s file-storage service for legitimate purposes from accessing their own files.

The Mega servers, which were primarily leased from a company called Carpathia Hosting, remain offline, though the data that was stored on them has not, as yet, been wiped. But Mega can no longer pay for the cost of keeping the servers in place, it having had its assets seized by the US authorities, and Carpathia says not being able to reuse those servers for other clients, while having to store the hardware in a cooled environment, is creating a considerable financial burden.

Prosecutors say that they have all the evidence they need from the former Mega servers, and that Carpathia could, therefore, now wipe them. But the server firm fears that it could be sued by third parties who lose data if it does delete all the former Mega content. Meanwhile both the Mega team’s lawyers and the Motion Picture Association Of America have asked for access to the data, the former to aid the Mega executives’ defence, the latter to help in civil proceedings being planned against the defunct digital company.

Mega’s lawyers proposed they handle the return of legitimate data to their client’s former customers, while also getting the evidence they need to aid in the firm’s defence, and to that end attorneys agreed a deal to buy the servers from Carpathia. But the MPAA objected to any deal that would give Mega access to its old files, while the US authorities refused to free up any of the digital firm’s seized funds to enable such a deal.

The Electronic Frontier Foundation, which is representing some of the customers who lost data as a result of the Mega shutdown, has said the US government should take responsibility for the return of legitimate data, and fund any work required to separate unlicensed from user-owned content, and to put the Mega servers back online for a short time period.

But prosecutors are having none of it. As also previously reported, in a submission to court earlier this month, the US Attorney for the Eastern District Of Virginia, Neil MacBride, said his office was happy for Carpathia to delete all the Mega data if the server company couldn’t afford to maintain it, adding that – while he sympathised with former Mega customers – the file-transfer service’s terms and conditions warned them to keep local back ups of files.

And when all concerned parties met in court on Friday, reps for the US government maintained that line, while also arguing that Carpathia is not the innocent third party in all this that bosses at the server firm have claimed.

Arguing that, if anyone should pay for the return of legitimate data to former Mega customers it should be the server company, the government’s rep at the hearing said Carpathia had made $35 million from MegaUpload over the years, and had received thousands of legal notices about the unlicensed content it was hosting for the Mega enterprise, so couldn’t now claim to have been caught “off guard” by the authorities’ swoop on its former client’s operations

Having heard arguments from all sides, Judge Liam O’Grady – who expressed some sympathies with regard to Carpathia’s situation – called on all sides to meet over the next fortnight and to try to reach an agreement on what to do with the Mega data. He said that, unless any one stakeholder objected, he’d appoint a magistrate judge to help with the negotiations, adding: “Let’s get together and see if you can’t work it out”. He confirmed that if necessary he’d wade in at the end of the month and rule on what should happen, but said he’d prefer a voluntary agreement be reached.