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Web shifts in the wake of the Mega arrests

By | Published on Wednesday 25 January 2012


Since the arrests of various MegaUpload execs last week, the websites of some copyright owners, and their trade bodies, are still very wobbly following a wave of retaliatory hacktivist attacks.

However, some other sites of dubious legality have also curtailed their operations – in one way or another – as a result of the American authorities swooping on the Mega management team. Those sites, including Filesonic, Fileserver, VideoBB, VideoZer, FileJungle, FilePost, UploadStation and, also allow file-transfer services, and have also been accused by content companies of enabling mass copyright infringement, and of doing too little to stop the use of their platforms to share unlicensed content.

Filesonic and Fileserver have probably gone furthest, putting blocks in place that mean users can now only download content they themselves uploaded. This means that the platform can only be used to make back-ups of content, or to move digital files from one device to another, and users cannot make public links to their content available or access other peoples uploads. It’s not clear if this is a temporary or permanent change, but many of those who have paid subscription fees to the two companies for file-sharing services will not be pleased.

Presumably management at both Filesonic and Fileserver fear also being targeted with criminal action if they are seen to be profiting from copyright infringement – being sued by rights owners is one thing, but being arrested and facing jail time quite another (five years for copyright crimes, though other charges made against Team Mega could result in 20 year jail terms).

There are parallels with what happened after the landmark Supreme Court ruling against Grokster in 2005, which caused several other American P2P file-sharing providers (though notably not LimeWire) to go offline almost immediately, amidst fears the owners and financial backers of such technology could also be sued for millions. Though this time around, not only are the stakes higher – it’s criminal rather than civil action – the impact goes beyond the US, given Mega was a Hong Kong-based company, and its executives were outside the United States when arrested.

That said, jurisdiction is still an issue – the US courts and authorities were in a better position to act against Mega because it had a key server base within the States. Sites with no operations of any kind within the USA may feel they are safe from a Mega-style swoop, though some of the file-transfer sites tweaking their operations this weekend focused on blocking users from America, and ending alliances with partners and resellers there, to put further distance between their set ups and the jurisdiction of the American courts.

The shut down of the Mega sites completely, coupled with the impact of the Mega swoop on other file-transfer services, is likely to immediately boost legitimate online content services, or so says the Recording Industry Association Of America, which responded to the action against Schmitz et al in a blog post. Although you probably can’t see at the moment because the trade body’s website is down again amidst ongoing hacktivist action. But the Association’s data chief, Joshua P Friedlander, said that, while he knew a portion of Mega users would find other unlicensed sources of content, web trends following the closure of LimeWire in 2010 suggest some, maybe many, will be forced to try out legit digital content platforms, and they might like what they see.

Citing post-LimeWire digital stats, Friedlander writes: “So where did those [LimeWire] users go? There’s good data that shows many turned to legal services. In 2010, digital album sales grew 13% while digital tracks only grew 1% according to The Nielsen Company, and many suggested that rapid growth in download sales was finished. But in 2011 [after LimeWire’s demise], digital sales rebounded, with digital album sales up 19% and digital tracks up 8% versus the prior year. [And] when Billboard looked at the data after the LimeWire shutdown it said ‘The spike in sales was immediate, notieable and lasting’. Collectively, this evidence strongly suggests that the shutdown of illegal sites helps create a thriving and diverse digital marketplace”.

Which is all lovely. Though, of course, the owners of file-transfer sites are not totally wrong when they insist that their services have legitimate uses, allowing users to store, distribute and share content they themselves own. And while it may be true that for some, maybe many, of these file-transfer platforms, the vast majority of users are accessing illegal content, what about those who do not?

There is a real demand for web platforms that allow users to share their own content with others, and while the Mega companies may have been dodgy in a number of ways, what about those file-transfer firms who have legit intents, but who may inadvertently enable some infringement? Of course that brings you back to the concerns stressed by opponents to the American web-blocking proposals in SOPA and PIPA last week – will basically legit services be lost in collateral damage?

Meanwhile some MegaUpload users are asking what happens to legit content they had uploaded to the Mega company servers, which are now offline? The Spanish branch of the Pirate Party has already announced its intent to pursue a civil action against the US authorities, who they believe have breached Spanish law by “misappropriating personal data” when they seized Mega’s servers. Supporting this action, the UK branch of the Pirate Party noted yesterday: “Much of the apparently infringing content held at MegaUpload is still available via other means, so closing the site has not had any serious impact on piracy. On the other hand, millions of archives stored entirely legitimately by private individuals and organisations are now offline – and this clearly causes significant personal and economic damage”.

Finally in Mega news for today, while hacking group Anonymous has been leading the hack-attacks against the US government and big copyright owners in the wake of the Mega arrests, it yesterday denied involvement in a project called, which reportedly plans to buy server space and to set up a service to replace MegaUpload. The venture is looking for donations to fund the purchase of server space in Russia, outside the jurisdiction of the US courts (though PayPal has shut down its account, so it’s not clear how donations can be made).

Despite seemingly being associated with the Anonymous movement by name, organisers of have admitted there is no official link, while some of those involved in Anonymous have warned the Mega-replacement project could be a scam mainly aiming to get cash off those who feel angry about the Mega-empire’s demise. However, subsequently denied it was a scam via Twitter, adding that any funds raised would be used to fund shared server space.