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Regardless of the number of legislations that passed, the immensity of the World Wide Web makes it difficult to be monitored (Click here to read LegallyIndia's opinion on SOPA). In fact, so vast is the internet that there exists an uncensored and control free space called the Dark web which is estimated to be nearly 500 times larger than the internet that Google knows. In the Dark web, free users share both legal and illegal files. If you were to imagine it, it would be like an underground network of tunnels, so deep under that almost no one knew where or how they existed.


MEGAUPLOAD is nowhere near as cool as the Dark web. It depends on novice internet users who want the power to upload their files to a server and then either download it to their computers from another location or share it with their friends. For a fee, you could get gigantic storage space as well as breathtaking download speeds. It was started in 2005 by baby faced Kim Dotcom whose original name is Kim Schmitz. He, however, is no amateur when it comes to internet. A hacker, he was given a two year suspended in 1998 for hacking into servers belonging to United States government as well as a German Bank. He made a few millions during and after the dotcom boom in 2000. MEGAUPLOAD, however, is said to have been his biggest money spinner. The US Department of Justice alleges in its indictment that MEGAUPLOAD's revenue was nearly $175M (Click here to read the indictment)


How exactly did MEGAUPLOAD make all this money? The indictment states that it made money mainly through advertising and subscription fees. Although initially the company depended on third party advertising companies such as Google and AdBrite, in 2009 the company created Megaclick: its own advertising network. Since a majority of the users were not premium users, it was important for the company to show maximize revenue from its advertising. Every free user had to see the advertisements to view the hosted content. After watching 72 minutes of video on its proprietary software, users were encouraged to sign-up as premium users. In return for a fee, it allowed users to watch unlimited videos and offered better bandwidth. The DOJ alleges that since most copyrighted material would be in excess of 72 minutes, users would sign up as premium users. This allowed MEGAUPLOAD to profit from copyrighted material without sharing the revenue with the owners of the copyright. The harm to the copyright holders is estimated to be USD $500M.

Much of the 5 criminal charges are based on the conduct of those who were a part of the company. For example even though the website did not provide users with a search engine, employees had the ability to search and watch copyright videos. Under the Uploaders Rewards Program, the company paid users to post copyright material and encouraged them to publicize the links on other websites. Under the Digital Millennium Copyright Act MEGAUPLOAD was to remove copyrighted videos as soon as it came to its knowledge. The website provided copyright holders the option to report videos that they deemed violated their rights. Copyright holders complained that the website never really complied with the DMCA since it only deleted the links that were provided to it but failed to delete or notify the copyright holder of the existence of duplicate copies; which were available to it on its database. Since the company did not remove the videos even after knowing about their existence on its servers and profited directly from their availability, it violated the Act.

 

MEGAUPLOAD is not the first website to be targeted. On 20 January 2012 US District Judge Anthony J. Trenga sentenced 24 year old Mathew Smith to 14 years imprisonment followed by two years of supervision, a fine of USD $172,387 and forfeiture of equipment used in running NINJAVIDEO.NET (Click here to read the statement on Mathew's sentence by the Department of Justice) It came close on the heels of the arrest of Kim and his 6 associates. Even without SOPA and PIPA, the U.S Government is not powerless. The U.S. Immigration and Customs Enforcement under the US Department of Homeland Security in 2000 setup the Intellectual Property Co-ordination Center in partnership with 19 domestic and international agencies. The aim of the center is to encourage those affected by copyright violations to report the crime directly on a dedicated portal. To report a crime and help the investigating agencies, the center encourages complainants to provide their personal contact details, description of the crime, information such as the rights holder, alleged violator and how the internet is being used in the alleged crime.


Coming home, could the Indian Government also prosecute MEGAUPLOAD? Under rule 4 of the Information Technology (Intermediaries guidelines) Rules of 2011, once the  intermediary better known as your friendly social network or file hosting service provider is informed or comes to know about the existence of copyrighted material, it must delete the files within thirty-six hours. Initially, it was thought that as long as intermediaries followed due diligence with regard to content available on their website, they would not be prosecuted. However, this view is being challenged on the ground that while Section 79 of the amended Information Technology Act states that intermediaries will not be liable under any law for third-party data hosted on their website (due-diligence having been followed), Section 81 states that rights conferred under the Copyright Act, 1957 or the Patents Act, 1970 can be exercised (Click here and here to read the opposing views). The decision of the Delhi High Court in the case against FACEBOOK and GOOGLE should provide us a better if not clearer understanding for the above scenario.



Appearing before the North Shore District Court, lawyers representing the United States Government before Judge David McNaughton succefully delayed the granting of bail to Kim and 3 other associates. Within the next 45 days, the US Government will have to file papers regarding the extradition of all those in the custody of the New Zealand police. MEGAUPLOAD is already assembling a team of global lawyers. If the US Government succeeds in bringing the accused to face a judge in the United States, Government lawyers will have to face off with Robert Bennett who has defended Bill Clinton and Enron in the past. For now it seems extremely uphill task for the legal team defending Kim Dotcom, his associates and the quagmire that is MEGAUPLOAD.

US Stop Online Piracy Act (SOPA)
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