Last Wednesday, hundreds of websites, including Wikipedia and Reddit, shut down their services for 24 hours in protest at the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA). The bills, which were introduced by the US House of Congress and Senate respectively, have now been put on hold.
Designed to crack down on copyright infringement and trafficking in counterfeit goods, the bills’ main targets are foreign ‘rogue websites’, piracy sites that are hosted abroad and are therefore currently outside the reach of US law. Serious concerns have been raised that the SOPA bill would authorise the US Department of Justice to seek court orders against websites outside US jurisdiction.
Yet amid the loud protests that led to SOPA and PIPA being put on the back burner, the US Department of Justice seized the domain names of online company Megaupload, which is registered in Hong Kong, and shut down its sites. The very day after the blackout protests, the FBI shut down the file-sharing site – one of the largest sites on the web with over 50million users a day – claiming its founder, Kim Dotcom (formerly Kim Schmitz), and his associates were entangled in a ‘Mega Conspiracy’ of racketeering, money laundering and infringing US copyright to the tune of US$820million.
Like a dramatic Sopranos episode, 76 officers from the FBI and the Organised and Financial Crime Agency New Zealand (OFCANZ) swooped down in helicopters in a dawn raid of Kim Dotcom’s Auckland mansion. Armed officers found Dotcom in a panic room, where there reportedly was a shotgun (although it transpired in other reports that the gun was in a safe). For added drama, the raid was timed for Dotcom’s thirty-eighth birthday celebration, so his party guests could also be rounded up. Authorities seized artwork, computers, documents and 18 luxury cars, reportedly affixed with number plates such as ‘GOD’, ‘MAFIA’ and ‘EVIL’. Three men were arrested along with Dotcom and two others sought by the FBI were located at a later point. One more man is still wanted by the police. The four arrested in the raid have been remanded in custody until Wednesday. They could face extradition to the US and five to 20 years in prison for racketeering, copyright infringement and money laundering.
The indictment states that the owners of Megaupload used a business model expressly designed to promote uploading of copyrighted works and make them available for many millions of users to download. The FBI claims Megaupload offered a rewards programme that would provide users with financial incentives to upload popular content and drive web traffic to the site. It paid users whom they specifically knew uploaded pirated content and publicised their links to users throughout the world. Megaupload has been charged with conspiring to launder money by paying users through the sites’ uploader reward program and paying companies to host the illegal content. Most importantly, it is claimed that Megaupload failed to terminate accounts of users who had committed copyright infringement breaches, selectively complying with obligations to remove copyrighted materials from their servers and deliberately misrepresenting to copyright holders that they had removed infringing content.
Megaupload has denied any wrongdoing in regard to copyright violation and the company’s attorney has said its sites were wrongly shut down before the owners were allowed to address the charges against them. Megaupload says the site featured a tool to report ‘abuse’, gave copyright holders the ability to hunt for illegal content, and was registered with the US government under the Digital Millennium Copyright Act (DMCA) – a law aimed at fighting piracy.
The DMCA provides safe harbour for sites that promptly take down infringing content. However, safe harbour does not exist if a site has actual knowledge and does nothing about it. And this is what the case against Megaupload is based on. The FBI claims that the anti-theft efforts were just a façade, that the parties involved openly discussed their infringing activities, and that the DMCA provisions were used to give the appearance of legitimacy only, while the actual material was never removed (only some links to it were).
Megaupload is just one of several popular services known as ‘cyberlockers’ that allow users to upload files and access them from wherever they want. Sites like Dropbox, YouSendIt, RapidShare and Hotfile take little or no responsibility for the material their users upload. In its defence, Megaupload said it was impossible for it to check everything it hosted. Other storage sites have now disabled its sharing functions in order to protect themselves from legal action.
Under current legislation, websites are not liable for damages as long as they remove pirated content when they are notified by the copyright holder. On many user-generated content sites, like Wikipedia, Twitter and YouTube, users are responsible for their own content and not the company. The business model of these sites rests on the fact that they do not control what users post as moderating the sites would require the employment of thousands of lawyers around the clock. It would be an impossible challenge to prosecute several thousand people, particularly when a huge proportion of them are anonymous or pseudonymous.
While Megaupload probably hosted illegal content, the site was also used legitimately by hundreds of thousands of people around the world to upload software for collaborative working or to share files that were too large to send by email. Because no distinction was made between legal and illegal content when the site was seized, many users are now in limbo, not knowing what is happening to their content that is stored in ‘the cloud’. So far the FBI has given no indication when, or even if, they will be able to access their files again.
So what has the shutting down of Megaupload achieved? We should be clear that it will not stop other uploading sites from appearing. Such sites thrive because they feed into a certain juvenile sense of entitlement that exists today. The people behind these upload sites are primarily driven by a childish, demanding outlook that says ‘I want this movie and I want it now!’ That attitude will not seize because of this case. Nor will online piracy be stopped by the FBI’s actions. Europe’s Digital Agenda Commissioner Neelie Kroes put the case well when she stated: ‘Piracy won’t be minimised until the amount of legally available content is increased. Piracy will always remain, but if the entertainment industries are smart enough they’ll eventually deliver services that make unauthorised downloading obsolete for most people.’
The internet grew out of a culture of sharing knowledge and information. Rather than spending billions in fighting online piracy, maybe the entertainment industry should use those resources to reinvent their services for the digital age and work towards adapting the existing copyright laws to align with the new digital environment.
There are good reasons to be critical of the demonisation of Megaupload or any other sites the US authorities deem as ‘rogue’. Yet there is also a problematic element in the attitude of some upload sites and their backers towards the notion of copyright and intellectual property. More often than not, these concepts are seen as something simply to ignore and override rather than debate and reform.
Whatever you think of Kim Dotcom and Megaupload or of the pros and cons of online piracy, the actions of the US and New Zealand authorities should be strongly opposed. Based on the fact that some of Megaupload’s servers were leased in the US, and the website was deemed to be targeted at its citizens, the US government has shut down and seized the assets of a business based in a different continent without a trial or going before a court. Megaupload has been presumed guilty before any evidence has been considered or any jury asked to review the case. And this has been allowed without SOPA and PIPA even being in place.
This is a very worrying trend for the future of the web and justice as a whole and it should be challenged as forcefully as possible to ensure that governments are not allowed to curb our rights and freedoms, either online and offline, in the name of fighting online piracy.
This article was first published in spiked.