This one I think I could see coming, certainly much more than Kodak’s filing for Bankruptcy. Not even due to the nature of the service that they provided, but because they have been on the fringes of collapse for a little while now. They recently even got some very famous singers and musicians to produce a tribute song to them, which can be found here (warning, cheese alert).
For those not up-to-date with the scenario, MegaUpload has been forced to shut down and terminate it’s website with immediate effect by the Department of Justice. The founder Kim Schmitz, Finn Batato and Mathias Ortmann have all been arrested by the FBI with Bram van der Kolk arrested by the Organised and Financial Crime Agency of New Zealand. For those of you hoping this was just a blip and MegaUpload would return, you’re going to be disappointed.
The timing of this shut down is however quite interesting. It’s come only hours after the internet wide SOPA/PIPA blackout protests taken on by many internet websites including Wikipedia and Reddit. In retaliation to the shut down of MegaUpload, the now infamous hacker group Anonymous set up to take down the US Department of Justice and related websites.
I’m not though too sure how much can be taken from the timing of the shut down. If it was done to show that they still carry authority despite the protests, then it also shows that they don’t necessarily need SOPA or PIPA to maintain control over any potential pirating websites. Then again, if this was not the point and it was purely coincidental, then they could have chosen a much better time to release the news of it happening; they have enough PR control power, even in this day and age, to do that.
However they didn’t, instead they chose to take them down now and make it public. Unless it was in some way coincidental (for example perhaps they only just received enough evidence to take them down) and they deemed it might help sway things back in favour of SOPA and PIPA, a tactic I feel won’t have worked.
I also quite like this excerpt from the indictment file:
“. . . were members of the “Mega Conspiracy,” a worldwide criminal organization whose members 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.”
Pretty sure the collective “Mega Conspiracy” has been imagined up by some lawyer in his dorm. It also sets to place them on a similar to scale to something like the Illuminati. The reported amount they have laundered really is quite staggering though; meaning it’s probably been fabricated somewhat. When you see these “estimated harm” figures, it does sometimes feel like they take the actual value of something and multiply it whatever number comes into their head.
From reading this particular indictment file, it does also feel like the “Mega Conspirators” could have been a bit more savvy and astute in keeping themselves within the law; even if they didn’t really want to stay within the law. For example:
“25. On or about June 24, 2010, members of the Mega Conspiracy were informed, pursuant to a criminal search warrant from the U.S. District Court for the Eastern District of Virginia, that thirty-nine infringing copies of copyrighted motion pictures were present on their leased servers at Carpathia Hosting, a hosting company headquartered in the Eastern District of Virginia. A member of the Mega Conspiracy informed several of his co-conspirators at that time that he located the named files using internal searches of their systems. As of November 18, 2011, more than a year later, thirty-six of the thirty-nine infringing motion pictures were still being stored on the servers controlled by the Mega Conspiracy.”
Now, just how much money do you think they would’ve lost in the grand scheme of things had they simply removed those files from their servers? I think this is a case in point where greed got the better of common sense and good ol’ rationality. In the end though, it cost them. Big time.
Still, the closure of the once giant file-sharing company will pave the way for smaller companies to come more into the limelight *ahem*.
 LA Times – File Sharing MegaUpload Shut Down For Piracy By Feds
 Wikipedia.org – MegaUpload Lega Case
 LA Times – Justice Department Indictment of MegaUpload