Megaupload founder arrested as US shut down popular file-sharing site

The founder of one of the world’s biggest file-sharing websites, Megaupload, has been arrested for running the website that breaks US online piracy laws.

Kim Dotcom (also known as Kim Schmitz) and three others now face extradition hearings and prison after the US Department of Justice sent New Zealand police to seize their 'playboy lifestyle' homes on Thursday.

More than $8 million in cash, luxury cars and guns were also seized after search warrants were granted around several properties in Auckland. They could face 20 years in prison for conspiracy to commit racketeering and money laundering, along with other offences in copyright.

The popular website is the latest to face a battle with the US government, due to its distribution of pirated music, films and other files.

Around $500m in revenue has been lost by copyright holders, whilst the indictment against Megaupload has stated that the website earned $175m through advertising and premium memberships.

“This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime,” the DOJ said in a statement.

Hacking group, Anonymous, staged its own strike against the collapse of Megaupload by infiltrating the Justice Department’s website during Thursday evening. After the announcement about Megaupload was made, the group momentarily took down the DOJ website, along with others.

The case is highlighted due to this week’s legislation protest against SOPA and PIPA, where many websites ‘blacked out’ for a one day strike on Wednesday. Despite what the public may think, we can’t link these two together as a plot to get back at each other. Federal authorities have stated that there is no link between the two actions.

For one thing, the investigation into Megaupload began back in March 2010, showing that it takes a long time for these actions to be dealt with. Whether it can be seen as a coincidence that the arrests happened a day after the SOPA blackout is a question that may not be answered, but has definitely raised some eyebrows.

The legislation aims to combat piracy from non-US websites and block access to websites that distribute such files. However, this could potentially damage freedom of speech on the Internet; one of the main reasons that many organisations and users sparked the protest the day before Megaupload’s comedown. With countries, including China, already using internet censorship, we could enter a similar outlook for the Internet.

Megaupload is a website based in China, but also holds servers in the US. The fact that SOPA and PIPA focus on non-US websites rules out the idea that the government are taking hold of the idea of the bills before they’ve been accepted. The US-based servers are enough to spur on a legal battle against the website.

The fact that the US has managed to shutdown one file-sharing site might result in them tackling another website in the not-so-distant future. The anti-piracy laws are still intact, but the bills have still got a long way to go until they are passed. Either way, this could be the beginning of the end for file-sharing websites as we know it.

Could this be the first of a string of shutdowns by the US government? Will this be the beginning of the end for all file-sharing, or will it prove to be a success all round? Do we really need SOPA/PIPA?

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