MegaUpload - "It's War!" But How Bad Is The Big Guy?

If you're wondering how Mr Big at MegaUpload made all his money and whether any of that moolah can really be legal, then consider how some of these "locker room" services also provide entirely legitimate purposes, too.  Here's a piece from Dwight Silverman at TechBlog

It’s war! MegaUpload, the Feds, Anonymous and mutually assured destruction

[Note: Congressional action on both the House's Stop Online Piracy Act and the Senate's PROTECT IP Act have been indefinitely postponed, effectively shelving both bills. See the update below.]

When the Federal Bureau of Investigationshut down MegaUploadand coordinated the arrests of some of its executives on Thursday, the agency did so because it believes the primary purpose of the service was to illegally distribute copyrighted material.

MegaUpload is what’s known as a file locker, which lets users upload files to a server and then provide access for others to those files. Clearly, a site like this can be easily used to share copyrighted music, video, books and software.

But it also is used to distribute legal files. Many businesses and individuals rely on these locker services to share and collaborate in a legitimate manner.

There are quite a few well-known services that are similar. Lifehacker has a list of MegaUpload alternatives, and they include some familiar names: DropBox, RapidShare, SugarSync. Even Microsoft has a file-locker service, Windows Live Mesh. All let you upload files to private, online folders and then provides links so others may download what you’ve placed there. They also forbid the uploading and sharing of copyrighted content, and warn they will remove infringing files and close accounts to enforce those rules. But you know, of course, that even these legitimate sites also have some copyrighted material posted for private sharing.

MegaUpload had similar posted restrictions. So why was it targeted? The federal indictment alleges that MegaUpload and its principals “engaged in criminal copyright infringement and money laundering on a massive scale with estimated harm to copyright holders well in excess of $500,000,000 and reported income in excess of $175,000,000.”

The feds allege a long list of criminal activity, which is summarized by GigaOM. Among the most interesting items:

• Other emails show how executives discussed cash rewards for uploaders who had provided specific DVDs and other copyrighted works.
• Further emails show how some of the executives scoured their own service to download copies of The Sopranos  and various music albums.
• The indictment even includes chat logs with conversations between company executives, which include statements like: “we have a funny business . . . modern days pirates ”
• A MegaUpload programmer who was charged as part of the indictment uploaded multiple DVDs to the site.
• Some of the emails show that MegaUpload had an interesting policy on when to follow take-down requests. When asked by Warner to take down files, the site’s CTO wrote in an internal email: “We should comply with their request — we can afford to be cooperative at current growth levels.”

If these allegations are true, it appears that the operators of MegaUpload knew what was on their servers (in some cases, grabbing infringing material for themselves) and largely turned a blind eye to what was being uploaded by its tens of millions of users.

Of course, there were also legitimate users on the service, many of whom stored business-related documents. TorrentFreak has compiled Twitter updates from people complaining that they lost access to crucial files as a result of the MegaUpload takedown. They are collateral damage in the anti-piracy war.

And if you had any doubts that this isn’t part of a battle, those were quelled by the actions of Anonymous, the hacker collective, which quickly moved to take down federal government and entertainment industry sites in revenge. Shortly after the MegaUpload arrests and site seizure, websites for the Motion Picture Association of America, the Recording Industry Association of America, the U.S. Department of Justice, the FBI and others were rendered inaccessible by a Denial of Service attack coordinated by Anonymous.

There’s a chance you may even have been part of the takedown, according to Adrian Chen at Gawker, who says links posted to IRC channels and Twitter contributed to the flood of data that disabled target sites:

Here’s one reason they’ve been able to muster so much firepower: Anonymous members are distributing a link that ropes internet users into an illegal DDoS attack against these websites simply by clicking it. The link is being shared widely on Twitter and in Anonymous chat rooms, often with no context except that it relates to Operation Megaload. I clicked it a few minutes ago because it was being spammed in an Anonymous chatroom and found myself instantly DDoSing Universalmusic.com, my computer rapidly pinging the page with no way to stop except quickly closing the window.

The link is a page on the anonymous web hosting site pastehtml. It link loads a web-based version of the program Anonymous has used for years to DDoS websites: Low Orbit Ion Cannon. (LOIC). When activated, LOIC rapidly reloads a target website, and if enough users point LOIC at a site at once, it can crash from the traffic. Judging from a Twitter search, the link is being shared at a rate of about 4 times a minute, mostly by Spanish-speaking users, for some reason. (Here’s a link to the Twitter search, just don’t click the PasteHTML link.)

Read the full blog entry by clicking the link

Source: Houson Chronicle