The implications of Megaupload

May you live in interesting times, the Chinese say. Oh my, aren’t we blessed? The file-sharing site Megaupload has been the subject of an international law enforcement operation by U.S. authorities, who have arrested six men charged with running an international criminal operation engaged in copyright infringement. A fact that has been less reported is that the FBI also managed to shut down the site through technical means by ordering their registrar to seize the names, so as of today the address www.megaupload.com and related domains do not resolve in the system. Who needs SOPA?

I am looking for superlatives to use in the case of Megaupload and I keep coming short. The site was huge, it accounted for 4% of Internet traffic and received an estimated 50 million visitors per day. It is said that it used up more bandwidth than Dropbox, the very popular and acceptable digital locker. Megaupload operated a free service, but what really seems to have played a big part in its demise is the fact that it was a mega business (be prepared for excessive use of the word Mega in these paragraphs), with income estimated at $150 million USD in subscription fees and $25 million USD from advertising. I will truly never understand people who pay subscription fees to services such as Megaupload, but do not pay for content, but I digress.

I do have to admit that with figures like these, it is very difficult to feel sympathy for Megaupload, or to think of its owners as some sort of anti-establishment heroes. In most occasions I have a large cache of sympathy and understanding towards other points of view, but in this occasion it has been shut tightly by reading that the owners of Megaupload collectively owned 14 Mercedes-Benz “with license plates such as “POLICE,” “MAFIA,” “V,” “STONED,” “CEO,” “HACKER,” GOOD,” “EVIL,” and—perhaps presciently—”GUILTY.””, according to Ars Tecnica. Reading through the indictment, the picture that emerges is of a bunch of hackers that knew fully well that the site’s main business was infringement, evidenced by several internal emails and the existence of a reward program for mega-uploaders.

So, what will be the result of the mega bust of Megaupload? In the short-term we will witness some angry Anonymous activity against U.S. interests, which is already taking place, but as xkcd once commented, attacks on websites are akin to the removal of a public poster (already World War Web is trending on Twitter). Funnily enough, I also think that the action against Megaupload may end up killing SOPA and PIPA for good. Why do you need new legislation when your domain name seizure strategy is proving effective?

In the medium-term, if the information in the indictment is accurate, and if extradition is granted, it seems possible that those arrested will be found guilty of criminal infringement charges and will receive mega sentences (OK, enough already). It is also possible that there will be lawsuits from legitimate users of Megaupload.

In the long-term, I do not think that much will change. Megaupload was a one-off, a vastly centralised and popular system whose actions will mean that proving direct copyright infringement and even secondary infringement following the Grokster incitement doctrine will be easy to achieve. While it was big, MU did not command the market dominance of a Napster in its heyday, but like that service, it suffered from its decision to provide a very direct involvement with what its customers were doing. What we can really expect is that we will see more domain name seizures.

The piracy wars will now be fought in the domain name system.