File sharing, music sites, movie streaming what that is
allowed today may be admonished tomorrow. The problem? Almost everyone
interprets the laws differently
Kino.to and
Megaupload are history
Kino.to and Megaupload are history. One is a movie streaming
site, the other a file-hosting service. Both were shut down by authorities in
one fell swoop, on grounds that they were facilitating online piracy on a
massive scale. Naturally, the users are now under observation. So are we all
pirates then? A clear "Yes" or "No" answer simply does not
exist, as the line between Legal and Illegal are both grey and constantly
shifting. But ignorance is not a pledge of innocence, and thus we analyze the
case of Megaupload, kino.to and Grooveshark to better understand our legal
boundaries and how we can prepare ourselves.
Hard times have fallen on content pirates recently. An
international alliance comprising of the entertainment industry, copyright
guards, the police and the judiciary has deployed itself successfully, with the
shutting down of Megaupload being both a big achievement and a big question of
content legality. The file-hosting service, famous as a source for movies, TV
series, music and software, was one of the biggest web services and was
responsible for 4% of the world's Internet traffic. Active since 2005 and with
hundreds of servers installed in the Netherlands, Canada and the USA, the
site's usage model would eventually be adapted by other hosting sites (which
has its own consequences to the user, but more on this later). Everyone could
upload and download something, though anonymous or unregistered users have file
size and download speed limits. On the other hand, premium account holders (who
paid for it) can upload and download content without restrictions, and there
were 180 million of them in Megaupload. Megaupload's infrastructure works like
this: users would upload content and distribute the links in forms and special
search engines. Of course, one could also use Megaupload legally as a web
storage for one's own data, though illegal copies surmounts it tremendously.
An international
alliance comprising of the entertainment industry, copyright guards, the police
and the judiciary has deployed itself successfully, with the shutting down of
Megaupload being both a big achievement and a big question of content legality
On the 19th of January, the New Zealand police issued an
arrest warrant for the arrest for four Megaupload operators, among them being
founder Kim Schmitz (also known as Kim Dotcom) in his villa in Auckland. The
FBI additionally took down the site (and partner sites like Megavideo.com) from
the net. Schmitz has been in jail since then - and the USA is pushing towards
extradition, since the charge weighs heavily towards them. Infringement of
copyrights, suspicions of money laundering, conspiracy to build a criminal
organisation -the prosecutors estimate the damages amount to approximately
USD500 million. Schmitz is facing a threat of up to 20 years imprisonment for
"Mega conspiracy" as coined in the bill of indictment. The action was
preceded by a two-year long investigation, which was carried out in New
Zealand,
the headquarters
of Megaupload is now Hong Kong
Hong Kong (the headquarters of Megaupload), the Netherlands
and Germany among others, and was led by the FBI. This arge-scale international
action is the first reply to the professional "digital dealers" that
are operational worldwide, said Christine Ehlers from the German Federation
against Copyright Theft (GVU) - but it is surely not the last. There were many
reasons why Megaupload was dealt with first.
Tricks in the Megaupload system
Tricks in the
Megaupload system?
A system was set up under Megaupload that specifically
facilitates copyright infringement. One example is in the handling of reported
infringements. While it was technically possible for Megaupload operators to
identify and delete illegal content (which also works in case of child
pornography or terrorist propaganda), they used a trick to spare ripped movies,
MP3s and software. During an upload, hash values (unique hash totals) would be
generated for the files and was different from already uploaded ones. If the
file already existed, only an internal link would be generated that would be redirected
to it. If a holder of rights has reported a file, Megaupload would only delete
this internal link, but not the original file which would remain available on
the server. Along with forged "Top Download" lists and the fact that
the operators also had uploaded protected contents themselves, a reward system
by Megaupload was an additionally important point of criticism. Till July 2011,
users were paid for contents (i.e. illegal copies) that were the most popular
to rake in many visitors to the site -from which the operators could earn more
via advertisements.
This trick has been used by Kim Schimitz since the midÂnineties.
At that time, he rewarded people who filled his Warez site with software, and
later he was provided with even Nintendo and Amiga games through his
connections to England. He would then sell their data, who were active in the
copying scene, to Gunter Freiherr von Gravenreuth, the notorious (and now
deceased) lawyer for cease-and-desist letters. An insider, who knows Schmitz
since early days, told us that Schmitz was despised in general even then. There
was even a bounty set on him in those times. A reckless and egomaniac wanna be
hacker: this is the perpetual image of Kim Schmitz.
Megaupload founder Kim Schmitz promoted his site even via You Tube videos,
and appeared himself beside famous musicians
In spite of all the circumstantial evidence, he is denying
the charges; Megaupload is ultimately an online service that is as an external
data carrier for the users but has no content. He employed star attorney Robert
Bennett, who represented the former US president Bill Clinton in the Lewinsky
affair, for the process. Of course, he resigned the position after just five
days. In any case, a few users suspect an entirely different motif for his
arrest - massive lobbying work in the music industry. In December 2011, Schmitz
presented a Cloud music player named MegaBox. 90% of its revenues were to be
given to the artists, bypassing the big labels. He could also win over Amazon
MP3 as a partner and he had already announced exclusive deals with artists in
the year 2012. This challenge to the music industry may be a reason behind the
investigation. "This industry is powerful enough", supposes Tim
Renner, a record producer and ex-CEO of Universal Germany, "especially if
one considers that US president Obama was supported in his presidential
campaign by the representatives of the industry and many artists". The FBI
however turns this theory down as fiction, explaining that the current investigation
has been running since 2010.
