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MPAA Sues Hotfile for 'Staggering' Copyright Infringement
The lawsuit, filed by the MPAA against Hotfile, is on behalf of 20th Century Fox, Universal Studios, Columbia Pictures, and Warner Brothers. "The MPAA argues that Hotfile not only encourages its users to upload illegal content, but actively discourages them from uploading files for personal use, because the site offers incentives for users to upload the most popular files (which invariably end up being copyrighted movies). And because the site charges membership fees before people can download the content uploaded by others, the MPAA says Hotfile 'profits richly while paying nothing to the studios' for the bootleg files."
They have a DMCA form for copyright holders to use. If the MPAA doesn't wanna use it, tough shit. It's why the safe harbor clause exists. They have a way to get the files taken down, and are choosing not use it and instead are doing an end run around the law plain and simple.
As far as I can tell, the DMCA does not protect Hotfile with the safe harbor clause. The safe harbor clause gets voided when you directly profit off of the infringement.
Hotfile doesn't directly profit from the infringement -- i.e., they aren't selling you copies of movies. They charge you for access to their system. What you do with that access is none of their concern. If people are uploading improper content then send Hotfile a DMCA takedown notice.
Hotfile is no more "directly profiting" than Youtube, which makes many millions of dollars every year. When Viacom tried to sue Youtube they lost because Youtube demonstrated that they have a policy in place to properly deal with DMCA takedown notices. As long as Hotfile takes stuff down when notified of infringement then I see no difference between them and Youtube.