MegaUpload, one of the world's largest file-sharing websites, was shut down Thursday by the U.S. Department of Justice, which accused it of violating piracy and copyright laws.
In an indictment, the Justice Department alleged that MegaUpload was a "mega conspiracy" and a global criminal organization "whose members engaged in criminal copyright infringement and money laundering on a massive scale."
The Justice Department said MegaUpload, which had about 150 million users, tallied up harm to copyright holders in excess of $500 million by allowing users to illegally share movies, music and other files. Prosecutors said in the indictment that the site's operators raked in an income from it that topped $175 million.
MegaUpload was just one of the many services that allow for the easy sharing of large files online. Others include sites such as Mediafire and Rapidshare and cloud storage services that allow for shared folders such as Box.net and Dropbox.
One way MegaUpload differentiated itself was with its online marketing campaign that featured celebrities such as rapper/producers Kanye West, Lil' Jon, Sean "Diddy" Combs and Swizz Beats stating in YouTube videos why they loved using the site. Other videos feature tennis star Serena Williams, boxer Floyd Mayweather Jr., Def Jam Records founder Russell Simmons and director Brett Ratner testifying to their use of MegaUpload.
The release of the Justice Department indictment came after dozens of websites, led by tech heavyweights Wikipedia, Craigslist, Mozilla and Google, altered their websites to protest two anti-piracy bills under consideration on Capitol Hill: the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA).
Critics of the bills say the proposed laws would give the Justice Department the ability to censor the Internet by giving the agency clearance to shut down a site without having to get court approval of an indictment, as it did with MegaUpload. Although the indictment was unsealed Thursday, it was issued by a federal court in the Eastern District of Virginia on Jan. 5, the agency said.
In a statement issued with the indictment,the Justice Department said "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 Justice Department said that at its request, authorities arrested three MegaUpload executives -- officially employed by two companies, Megaupload Ltd. and Vestor Ltd. -- in New Zealand, including the site's founder, Kim Dotcom, who was born Kim Schmitz. The agency is also looking to arrest two additional executives.
The indictment charges the two companies with running a "racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement."
According to the Associated Press, before the MegaUpload site was shut down Thursday, a statement was posted on the site saying the allegations made against it were "grotesquely overblown" and that "the vast majority of Mega's Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch."
Visits to Megaupload.com on Thursday showed the website as unable to load. The Justice Department had ordered the seizure of 18 domain names it linked to the alleged wrongdoing.
[Updated at 3:42 p.m.: As noted by Times reporter Ben Fritz on our sister blog Company Town, the hacker group Anonymous has allegedly lobbed a denial-of-service attack that has temporarily taken down the websites for the Department of Justice and Universal Music as a move in retaliation for the shutdown of MegaUpload. Forbes is reporting that the same attack has struck the sites for the Recording Industry of America and the Motion Picture Assn. of America.]
[Updated at 3:50 p.m.: The Twitter accounts @YourAnonNews and @AnonOps are taking credit on behalf of Anonymous for the web attacks on the websites of the Justice Department, Recording Industry of America, Motion Picture Assn. of America and Universal Music.]