Megaupload Shutdown: Should RapidShare and Dropbox Worry?

An anonymous reader sends in an article discussing whether other commonly used file storage sites are in danger of being shut down now that Megaupload has been closed. Quoting: "In the wake of the crackdown on the file-sharing website Megaupload, sites offering free content-sharing, file linking and digital locker services, such as RapidShare, SoundCloud and Dropbox, could be next in the crosshair of anti-piracy authorities. ... RapidShare and MediaFire are two of the biggest services left after Megaupload's exit. However, these sites have undergone a revamp, and now ... no longer host pirated content that could lead to a permanent ban. Others in the line of fire are DropBox, iCloud and Amazon S3, which support hosting any file a user uploads. Though their intention of supporting open file-sharing is legitimate, there is really no control over the type of content being uploaded."

Comments

Yes

[tehlinux]

Yes they should.

Re:Yes

[FreeCoder]

You're correct, and there's big difference between RapidShare and the likes of Dropbox. MegaUpload, RapidShare etc is clearly profiting from copyrighted content. They pay users to upload popular files, and in 99% of cases it is pirated content. In turn they profit when users want to access those files. It's a huge "industry", and there will most likely be many more arrests when the list of affiliates that directly made money by uploading copyrighted content without permission goes public.

Dropbox doesn't have any such incentive for users, and they're free to download from. It's the uploader that pays for file upload space just like with web hosting, and he (nor Dropbox) cannot make money by uploading pirated content.

Re:Yes

[FreeCoder]

It's not a matter of expecting them to police content or users, it's a matter of MegaUpload's intentions. The site was clearly profiting from piracy. Likewise, not all hosting companies are going to be illegal just because police bust a hosting company that clearly is profiting from illegal content, for example by naming themselves "Child Porn Hosting" or "Warez ISP" or where it can be proofed that the company is actively acting as such. In this case MegaUpload's internal emails also showed they were fully aware of this. On top of that they went around DMCA laws by not actually deleting the files. If other user uploaded the same file, it was not actually uploaded again but was only given private url. When DMCA notice came, only the specific URL was disabled and the infringing content was still available at any other URL. Then there is still the whole matter of directly profiting from it.

Re:Yes

[poity]

No, the issue isn't about storage of pirated files, it's about leveraging access to pirated content in order to make money.

The difference between MU and hard drive makers is that hard drive makers don't have revenue sharing schemes whereby they pay people who advertise and sell hard drives filled with pirated content. The more apt comparison would be a situation wherein Toshiba, Seagate, etc. are paying private individuals who possess pirated content to make that content available to the public in a scheme to drive hard drive sales.

Re:Yes

[shark72]

if the model is basically "we pay if your file is popular", but there is no checking of the actual file, whether the user has actual rights to the file or not, or encouragement of piracy specifically, all that's left is accusing MegaUpload of encouraging popular files.

Note the IF. What you describe is not how MegaUpload operates. If the indictments are to be believed, the operators were caught numerous times encouraging the sharing of content that they knew to be pirated.

You're correct that a truly content-agnostic file storage and sharing site should have nothing to fear. DropBox is safe. The operators of MegaUpload, however, serve as a textbook example of purposely avoiding all the safe harbor opportunities. This isn't because they were stupid -- far from it -- but because this is their very business model.

The legal concept of mens rea -- latin for "guilty mind" -- applies here. The MegaUpload guys, through their actions, have been nailed fair and square. This is their choice. They took the lucrative, but risky, path, of actively courting piracy. Their business model is wholly different than that of DropBox.

Re:Yes

[X.25]

You're correct, and there's big difference between RapidShare and the likes of Dropbox. MegaUpload, RapidShare etc is clearly profiting from copyrighted content. They pay users to upload popular files, and in 99% of cases it is pirated content. In turn they profit when users want to access those files. It's a huge "industry", and there will most likely be many more arrests when the list of affiliates that directly made money by uploading copyrighted content without permission goes public.

So, for the sake of the argument, let's assume that 'pay for downloads' program is still running on Mega.

And decides to upload a new song that (s)he just made.

And 50 million people download it.

And (s)he gets paid by Mega.

Would you have any objections to that?

Program in itself is not a problem. Problem is that most popular downloads were those that infringed copyright and were uploaded by random people.

Re:Yes

[Dr. Hellno]

If you find the closure of Megaupload troubling, just read the indictment. I won't consider the legal matters here, but the emails cited in the indictment paint a pretty clear picture of intent. They show that:

A) In many cases, Megaupload employees knew that *specific* files on the site were in violation of copyright, but they took no action to remove the content
B) Knowing specific files were copyrighted, megaupload still paid out rewards to those files' uploaders
C) In a few instances, staff members shared links to copyrighted content with eachother and with the internet at large.

Those are just the most egregious points, which basically demolish their claim of safe-harbor. But there's more: The claim of conspiracy at first sounds ridiculous and overblown, but it begins to make sense when the indictment describes all the ways Megaupload is alleged to have actively worked to conceal piracy. Claims of DCMA compliance are shot to pieces by an allegation that certain links were the subject of takedown notices, but remained active for over a year. I could go on, but just read the thing yourself, it's actually pretty interesting for a while.

The guys at Megaupload sound hella guilty. The only other explanation is a massive conspiracy involving the FBI and the Justice Department, but I have trouble believing that.

Re:Yes

[Anonymous Coward]

The standard created by the grokster SCOTUS case rest upon if they are "inducing" users to infringe copyright. I think that rapidshare and megaupload clearly fit that standard based upon their business models but dropbox does not.

Re:Yes

[paiute]

...Toshiba, Seagate, Samsung, Hitachi and Western Digital are profiting from Pirating because people store illegally acquired content on their hard drives.

Somewhere a lawyer smiled in his sleep and kicked his feet like a puppy after a bunny rabbit.

Re:Yes

[Anonymous Coward]

Who doesn't benefit from copyright infringement? Think about this: how many people would pay $50 or so for high speed internet every month if they couldn't download whatever they wanted? If you were restricted to only going to public domain sites, previewing one tenth of a song only before buying it, not allowed to download a movie and see it pixellated before going to theaters or buying the DVD, or couldn't download an ebook of a book to flip through before buying it, how much would that influence whether you even decided to keep an internet connection or not? Imagine if any of these actions which could lead to purchases resulted in an immediate arrest with no possibility of not getting caught (imagine a rigid system for this hypothetical situation). Would you still use the internet that much? What would the internet then become? A giant outlet for shopping, wikis, and social networks, and that's it?

A good question is what percentage of the internet relies on piracy -- both services like Wordpress and paid storage like GoDaddy hosting? Are subscriptions to high speed internet contingent upon users being able to pirate every now and then even if it's not to a really huge degree? How much would 4Mbps versus 1Mbps matter if you literally couldn't download DVDs, MP3s, pdfs, etc. without knowing you'd get caught? If you were restricted to mostly non-media-rich sites, how much would you need those extra Mbps?

Then what about the recording industries? How many people would buy songs happily if they could only legally hear it on the radio or listen to a :30 second preview before buying it? How much buyers regret would be there? What about films? How many people were introduced to their favorite films by seeing them online through some pirated means? And after that, how many bits of merchandise did they buy? And books, how many people bought new books after downloading a .pdf and loving it?

The problem with piracy isn't that they simply lose money, it's that piracy both stimulates and hurts their profits and there's a happy medium that needs to be reached in order to keep both the industries and the users feeling satisfied. They can't happily say to pirate and yet if they got rid of all of it, imagine how fewer tv series, movies, books, and songs you'd be exposed to if you couldn't first experience some crappy version of it online before opting to buy it as well as merchandise from the company that released it.

Another issue is the fact that they're spending ridiculous amounts of money on combating piracy but not in a way that doesn't adversely affect the harmless user. Encryption that doesn't play well with every platform and causes the average user issues, DRM that's harmful or debilitating, lawsuit after lawsuit, them trying to infringe upon our digital freedoms, despirately grasping onto a few dollars. After seeing the RIAA's profit listings on their website pdfs, I'd put good money on the fact that they're losing insanely more money creating DRM and paying for lobbyists and lawyers to sue some kid in the boondocks for downloading a DVD because the economy is too dead for anyone to afford one than they'd actually lose if they didn't despirately grasp so hard at every last dollar. Meanwhile, there are a lot of users they don't think about who use piracy to expose themselves to new products that they then purchase...

Perhaps if they "unclench" a little and just accept losing a little money (who isn't doing terribly besides the gas companies in this economy), they'd have more profits than in their kicking-and-screaming method that's currently making them more enemies than friends... Think, now that they've DRMed us to death, sued a bunch of kids across the country who now have their lives and futures ruined from a non-violent crime (serious, serious shame), and spent more money on lobbying than most of us make in a few years just to pass laws that infringe upon our freedoms, how much do you want to buy a CD or DVD from them now? Or is this bad publicity just making people more cautious but resulting in the masses wanting to vindictively ream them a hell of a lot harder now...?

They need to reassess their strategy...it sucks.

Re:Yes

[penguinbrat]

Those internal communication mean nothing - and here lies one of the core problems with all this.. The **IAA wants to pass the the buck and have the providers police their users. The only problem with that, is that any sys admin/tech support employee is *not* a lawyer (most likely), and if they want to keep their customer(s) - just because they find an mp3/divx/avi/iso file, they need to make sure that 1) it is copyrighted and 2) MORE importantly, that the customer does *not* have the right to re-distribute the given material and that is impossible to tell unless your an expert in the area. If employee X does not have that information and just because they see an mp3 file with the name Brittany Spears in it they suspend the entire account - they could be loosing a customer very quickly if it was legit and not to mention a potential law suit, as in think "slamming Brittany Spears" or something.

I work for a fairly large web hosting company, and we used to police our selves - if during any routine investigation (as in if someone reported a problem with their account) and we found anything suspicious we would suspend if it was "seemingly" obvious, although two specific incidents changed our policy on that relatively quickly. The first had to do with a Microsoft Development edition of some sort - it turned out the customer was a reseller and had the full right to have that on his site for purchase/download. The second was with a small record label out of the UK, iirc, selling/offering their own goods. Both incidents highlighted the fact that we were not qualified to tell whether something was illegal or not - so we essentially backed completely off, and unless we get a DMCA notice or one sent to the customer - all we do IF we see something very, very suspicious and they are somehow in violation of our RUP/TOS - then we only send them a ticket, if they dont respond with in a given amount of time that is something else entirely.

The point being, is that just because something seems to be illegal - doesn't mean it is, you/we have NO idea if the customer in question has some kind of weird contract with the copyright holder and if they are in violation of it or not - THAT is up to a judge and/or contract attorney to decide, no one else. We see stuff all the time across our large fleet of servers, and the fact that internal communications between employees reflect this is only pointing out something interesting is all. Whether something is actually illegal or not, is a point of contract law - not mere speculation of someone NOT well versed in this.

The flip side of this issue is that the Internet is a VERY large place, and it's simply next to impossible to check every nook and cranny for your various IP'd material - which where logically the rights holders would try and force the providers to police them self, which as noted above is impossible as well.

Conclusion - simply trying to fit a square block (brick and mortar business model) into a round hole (cyber space) just does not fit :-P

Probably not

[Zeikcied]

Not unless they're paying users for posting popular pirated content like Megaupload was.

Paying pirates for pirating stuff is illegal, and it left MU without the excuse of "We didn't know." At least the other sites, as long as they don't reward pirates, can claim they're doing all they can to keep the site clean.

Re:It depends

[FreeCoder]

But Dropbox doesn't try to profit from allowing users to download copyrighted material. Nor do they pay out to affiliates to upload popular content which almost always is pirated files. There's a major difference. And intent *does* count in court.

Doubt it

[clarkkent09]

Megaupload was the very blatant in it's disregard for copyright. I wonder why pirates don't post their stolen movies on youtube? Perhaps because Google is extremely diligent in removing copyrighted material and banning users who post it. If Megaupload did the same it would still be up.

Re:It depends

[larry bagina]

Court doesn't matter when the government decides to shut down a web site.

Re:No?

[Doctor_Jest]

Find three copies of Vanilla Ice's Song "Ice Ice Baby" on the site, and someone, somewhere will find a way to call that "willfiull infringement".... and have Dropbox shutdown. Why? Because the *AA's are criminal organizations, and copyright is and never will be a property right, but since we don't have the money to enforce the Constitution (we being the normal people)... corporations will assfuck us while the government holds us down.

Fuck 'em all. I don't give a shit about copyright anymore. I hate it all.

Re:SOPA lovers would love to take them down.

[cgenman]

I support the core idea of SOPA while opposing the bill, and I suspect many others do too. If you don't read the damned thing, SOPA sounds like "let's reduce the rampant unchecked piracy online." Sure, that's great. There are many reasons why people should have to really look if they want a pirated copy of The Hangover 2.

BUT: it's all the details that make SOPA / ProIP terrible ideas. Taking down sites on suspicion without a proper day in court is a TERRIBLE idea. We already have examples of legitimate sites caught in the crossfire, who never had due process before being destroyed. Breaking our DNS is a TERRIBLE idea. Giving law enforcement powers to US Companies is a TERRIBLE idea. And all of this is to take power away from our courts, bypassing what they can already do anyway. Oh, let's not forget that the distinction between a "US" site and a "foreign" site is ill-defined.

I'm sure there are many intelligent people who support the idea of reducing online piracy. I just wish they had read the bill.

Re:Safe Harbour

[Anonymous Coward]

Since when is it a crime to do the absolute minimum you can to comply with a law? Accountants get rich advising their wealthy clients and corporations on how to do exactly this.

Re:At least on dropbox

[eldorel]

if they close it I've still got my files locally

Are you certain of that?
If I delete a file from my dropbox folder on my laptop, it gets removed on my desktop.

What happens is someone with access to the dropbox server deletes a file?

Online "backup" services ARE NOT A VALID REPLACEMENT LOCAL BACKUP PROCEDURES.

They are for convenience and additional protection only.

Re:At least on dropbox

[Canazza]

It's not a backup solution. It's a Sync tool. Like SVN. If they took the servers down tomorrow drop box wouldn't get the latest list of files and wouldn't change the data on your pc.

Re:At least on dropbox

[eldorel]

While both you and I are aware of that, there are many people who are mislead into believing that dropbox is a backup service.

Heck, go look at their sales pitch.

"Dropbox - Secure backup, sync and sharing made easy"

This is plastered all over their web site, advertising, and over a million linked sites

And you are probably correct, if they took the server down no data would be deleted.
That would be why I specifically asked about the data being deleted.

However, consider what would happen if someone disconnected the front end web farm from the storage system during a federal seizure. Also, what about catastrophic failure at the datacenter?

Are we certain that the dropbox servers wouldn't assume that there was no data for a little while?
I haven't seen the code, so we can only hope that the system is properly designed.

Or, we can do exactly what I said in the original post, and KEEP LOCAL BACKUPS.