U.S. Government Cares Not For Your SOPA Protest: Megaupload Shut Down Today, Workers Arrested

The day after protests for Internet freedom: The U.S. Justice Department nukes popular site "Megaupload" from orbit, arrests employees, disrupts file sharing in corporate environments around the country.

The optics are incredible.

Mere hours after the conclusion of a day of Internet protest that saw many of the web’s biggest sites formally protest or shut down outright for the upcoming Stop Online Piracy Act (SOPA), file sharing site Megaupload.com was shut down and removed from the Internet. Four people working for the site were arrested in New Zealand by local authorities. All of this was done at the behest of the FBI and U.S. Immigration and Customs Enforcement (ICE).

The January 5th indictment, unsealed today, charges that the website earned $175 million from “distributing illegal content”. The U.S. made use of local law enforcement in New Zealand, Hong Kong, the Netherlands, Canada, Germany, the UK and the Phillipines to take this site down. To make up for the lack of a $175 million pile of cash laying around, the indictment went on to also include allegations of money laundering for selling premium accounts to people in exchange for faster downloads and uploads.

No fancy redirect page was put up, no warning was given to legitimate users of the site. One minute here, the next minute gone. This sort of action under the current system. The system that proponents for SOPA believe is not efficient enough. All that legal legwork used to get this far? That’s too difficult and too much trouble for “content owners”. SOPA seeks to streamline this process so websites can be taken down and people arrested even faster than before.

Speaking of legitimate users, by the by, Megaupload was definitely more than just a sea of pop songs and Hollywood blockbusters. The site was also a key destination for many corporate users who were looking for an inexpensive way to distribute large files to clients, coworkers, and customers – getting around the limitations imposed by e-mail systems and the security holes inherent in using FTP sites. A newly released study details just how useful Megaupload was to corporate users:

Before being shut down by the feds today, the file-sharing site Megaupload was extraordinarily popular with home Internet users—so much so that the file downloading habit was spilling over into the workplace in a significant way.

The shutdown of the site—and the arrests of four of Megaupload’s leaders today in New Zealand—are bound to have major consequences in the file sharing market. Although Megaupload’s presence in the corporate world may not have matched its overall share of Internet usage, its consumption of bandwidth was outpacing Dropbox and numerous other business-focused file-sharing services, according to a new study.

Remember all those warnings on how internet sites could go dark just like that in a post-SOPA world? It'll be just like today – except faster!

Further into the details…

Megaupload usage was found on the networks of 57 percent of the 1,636 organizations in the study. That’s quite a bit less than the 76 percent of networks with Dropbox traffic, and equal to the 57 percent of networks that have Box.net traffic. However, in terms of bandwidth, Megaupload accounted for 20,405 gigabytes, compared to 17,573 for Dropbox and just 86 gigabytes for the business-focused Box.net. The Dropbox numbers, indicating lots of traffic but a smaller average file size, suggest a mix of personal and work usage. Another consumer-oriented service accounting for a chunk of traffic was Filesonic, which appeared on 52 percent of networks and consumed 4,058 gigabytes.

Overall, Palo Alto tracked 76,225 gigabytes worth of traffic being used up by some 65 browser-based file sharing applications (including Dropbox, even though the Dropbox service can be used outside the browser). Counting only Web-based file-sharing, then, Megaupload accounted for more than a quarter of corporate traffic.

Needless to say, the sudden action by the U.S. government today in shutting down Megaupload will have instant and potentially significant ramifications in the corporate world for the dissemination of files. All this with no warning, and more of this being exactly what the supporters of SOPA want – a less free, more restricted, less convenient internet for the rest of us.

Megaupload has a history of responding fairly to requests to take down copyrighted material over and over again – which is what is required of them by the Digital Millennium Copyright Act (DMCA). To that end, Megaupload is a victim of nothing more than obeying the law – but apparently not obeying it hard and fast enough to suit the demands of “content owners”.

The Megaupload case will be massive, and will involve a large amount of computer hardware around the world. Megaupload owned as many as 525 servers in Virginia, 630 in the Netherlands, and more around the rest of the world.

The decision to hit Megaupload so hard, as if it was not doing anything to respond to DMCA requests when in fact it was, seems very curious - though perhaps those with power wanted revenge for having sand kicked in their face recently by the owners of Megaupload:

Yet the indictment seems odd in some ways. When Viacom made many of the same charges against YouTube, it didn’t go to the government and try to get Eric Schmidt or Chad Hurley arrested.

It’s also full of strange non-sequiturs, such as the charge that “on or about November 10, 2011, a member of the Mega Conspiracy made a transfer of $185,000 to further an advertising campaign for Megaupload.com involved a musical recording and a video.” So?

The money probably paid for a video that infuriated the RIAA by including major artists who support Megaupload. Megaupload later filed claims in US courts, trying to save the video, which it says was entirely legal, from takedown requests. (The RIAA has long said the site operators “thumb their noses at international laws, all while pocketing significant advertising revenues from trafficking in free, unlicensed copyrighted materials.”)

Given that the site was already using US courts to file actions; given that the government had Megaupload e-mails talking about using US lawyers to file cases against other “pirate” sites; given that the site did at least take down content and built an abuse tool; and given that big-name artists support the site, the severity of the government’s reaction is surprising.

In other news, somewhere out there international child prostitution and human trafficking rings still exist.