The sudden crackdown on popular online storage and file-sharing site Megaupload has prompted rivals FileSonic and uploaded.to to commit suicide by voluntarily limiting their file-sharing services and allowing users to only retrieve the files they have personally uploaded. No wonder, the U.S. feds' action has left everybody wondering whether other sites like Rapidshare, MediaFire, Dropbox, etc., which offer file-sharing and cloud storage services, will be next in the crosshairs of anti-piracy authorities.
The shut down of Megaupload has infuriated end users as not everybody used Megaupload for committing online copyright piracy or for carrying out illegal activity. The legitimate users complained that the shut down of the site prevented them from accessing their online files and those who did not back up their work, were the most affected.
No doubt, many Megaupload users were caught by surprise not only because the government's action was swift and silent, but also the site was already using US courts to file actions against various copyright pirates; the government had Megaupload e-mails talking about using U.S. lawyers to file cases against other pirate sites; the site has, on numerous occasions, taken down offending content and has a built-in abuse tool; and, big-name celebrities such as Kim Kardashian and Kanye West, who are supposed to be hurt the most by copyright piracy, are endorsing the site.
However, Jonathan Riggall, a Barcelona-based website editor, said the crackdown was inevitable. Riggall wrote on TorrentFreak, a blog devoted to file-sharing issues, that Megaupload was doing a great job of allowing people to share content on the Web. And though he didn't care if it's copyrighted material, he was certain that Megaupload would be the target of law enforcers as Megaupload and some similar sites are making loads of money out of making it possible for people to view pirated stuff.
Nonetheless, legitimate end users who used Megaupload to store and share their own manuscripts, work files, music, etc. are upset because they will no longer be able to access or share their content on Megaupload.
Some Megaupload users were very upset because they had recently paid money to become premium members and now worry that they can't get their money back.
Many felt that the Megaupload takedown, which came a day after Wikipedia and other sites went black in protest of the pending legislation SOPA (Stop Online Piracy Act) and PIPA (Protect IP Act), was largely symbolic as it gave a taste of what the government was capable of doing against online piracy.
The action by the Department of Justice against the leaders of Megaupload.com shows what law enforcement can do to protect American intellectual property that is stolen through domestic Web sites, Sen. Patrick Leahy (D-Vermont), the sponsor of PIPA, said.
However, Markham Erickson, head of NetCoalition, a group that represents Google, Facebook and eBay in lobbying against the legislation, said the FBI's seizure of Megaupload is alarming as it did not give the online company due process. Erickson fears that once the anti-piracy bills are passed, they would make it even easier for law enforcement to get permission from the courts to shut down the sites without letting them be heard.
Nonetheless, a DOJ spokesman said the federal government should not be blamed for taking down Megaupload.
It is important to note that Mega clearly warned users to keep copies of any files they uploaded, the spokesman said in a statement. Megaupload.com expressly informed users through its Frequently Asked Questions ('FAQs') and its Terms of Service that users have no proprietary interest in any of the files on Megaupload's servers, they assume the full risk of complete loss or unavailability of their data, and that Megaupload can terminate site operations without prior notice.
Indeed, this is a risk associated with any cloud locker or file-sharing sites — users should back up their files in their hard drives or else they risk losing access to their own data if a server goes out or if, for some reason, the data is seized by the U.S. government.
Following Megaupload's demise, Rapidshare and MediaFire are two of the biggest file-sharing services left. However, users of these sites need not worry so much as these sites have undergone a revamp and now only provide links to pirated content and do not HOST pirated content that could lead to a permanent ban.
MediaFire CEO Derek Labian told VentureBeat (http://venturebeat.com/2012/01/22/mediafire-megaupload-business-model-piracy/) that he isn't losing sleep over whether the U.S. government will attack his site because, unlike Megaupload, his site doesn't incentivize online piracy.
We don't have a business built on copyright infringement, Labain said. Like many other cloud-based sharing services like Box.net and Dropbox, we're a legitimate business targeting professionals.
Labian said Megaupload was under the scanner of the feds because it even gave users monetary rewards for uploading pirated content - uploaders of the most downloaded files would be given free account upgrades or even cash.
Megaupload was making a ridiculous amount of money with a ridiculously bad service, Labian said. We frankly don't see ourselves in the same space.
Labian acknowledged that some users might use MediaFire services for distributing copyrighted files, but added that he isn't bothered because MediaFire also works with various government bodies, including Homeland Security, ICE, and the FBI and in line with protocols laid down in the Digital Millimium Copyright Act, whenever MediaFire is notified of a copyright violation by the authorities, the company immediately takes it down.
Meanwhile, Alexandra Zwingli, CEO of Rapidshare, told Ars Technica that its service is an absolutely legal service - like Swisscom or YouTube.
Zwingli said Rapidshare conducts its business in a transparent manner without any anonymous intermediate business and has established a constructive dialogue with politics and society in the United States and in other countries.
Cloud storage services such as iCloud or Dropbox can also be in the crosshairs of anti-piracy authorities if they do not have a content filter in place.
However, it is unlikely that these services will be shut down abruptly as they have clear provisions in their Terms of Service (TOS) that state they will cooperate with the authorities in case of any violation of copyright laws. DropBox, for example, has a clear provision in its TOS that states that it cooperates with United States law enforcement when it receives valid legal process and will unencrypt files before providing them to law enforcement.
In conclusion, there's no need to lose sleep over the shutdown of Megaupload. Let's not forget that Megaupload was blatantly violating international copyright laws and snubbing its nose at the authorities. The feds have enough evidence to prove that the site was operating in bad faith. However, the way they so easily nuked the king of copyright violator only goes to show that passing the SOPA/PIPA would be giving them a sledgehammer to kill an ant.