MegaUpload to be deleted this week?

Megaupload may be deleted in its entirety. This after the file sharing site’s assets were seized by the FBI and company founder Kim Dotcom was arrested.

The deletion will occur, not because of any direct action taken by the FBI, but because it can’t pay the outside companies it uses to store its users’ data. According to Associate Press, a letter from the US Attorney’s office for the Eastern District of Virginia states that the companies could begin deleting content by Thursday.

The site’s attorney Ira Rothken says the company is doing everything in its power to stop the data from being deleted. “We’re cautiously optimistic at this point that because the United States, as well as Megaupload, should have a common desire to protect consumers, that this type of agreement will get done,” he said.

The news has sparked fears among the 50-million or so people who use the service, many of them legitimately.

In the wake of the federal action against Megaupload, a number of similar sites, including FileSonic and FileServe shuttered their services.

Others like RapidShare and MediaFire, however, tried to paint themselves as legitimate businesses with a different outlook to that of MegaUpload.

This viewpoint is in line with the official indictment used to support claims of criminal activity:

1. In practice, the “vast majority” of users do not have any significant long-term private storage capability. Continued storage is dependent upon regular downloads of the file occurring. Files not downloaded are rapidly removed in most cases, whereas popular downloaded files are retained. ( items 7 – 8 )
2. Because a small proportion of users pay for storage, the business is dependent upon advertising. Adverts are primarily viewed when files are downloaded and the business model is therefore not based upon storage but upon maximising downloads. ( items 7 – 8 )
3. Persons indicted have “instructed individual users how to locate links to infringing content on the Mega Sites … [and] … have also shared with each other comments from Mega Site users demonstrating that they have used or are attempting to use the Mega Sites to get infringing copies of copyrighted content.” (item 13)
4. Persons indicted, unlike the public, are not reliant upon links to stored files, but can search the internal database directly. It is claimed they have “searched the internal database for their associates and themselves so that they may directly access copyright-infringing content”. (item 14)
5. A comprehensive takedown method is in use to identify child pornography, but not deployed to remove infringing content. (item 24)
6. Infringing users did not have their accounts terminated, and the defendants “made no significant effort to identify users who were using the Mega Sites or services to infringe copyrights, to prevent the uploading of infringing copies of copyrighted materials, or to identify infringing copies of copyrighted works” (item 55–56)
7. An incentivising program was adopted encouraging the upload of “popular” files in return for payments to successful uploaders. (item 69e et al)
8. Defendants explicitly discussed evasion and infringement issues, including an attempt to copy and upload the entire content of YouTube. (items 69i-l. Youtube: items 69 i,j,l,s)

MegaUpload also fell afoul of the Digital Millenium Copyright act which provides safe harbour for sites that voluntarily take down illegal content. The act does not, however, provide protection if site is aware of illegal content and does nothing about it.

According to the federal indictment, MegaUpload’s executives: “… are willfully infringing copyrights themselves on these systems; have actual knowledge that the materials on their systems are infringing (or alternatively know facts or circumstances that would make infringing material apparent); receive a financial benefit directly attributable to copyright-infringing activity where the provider can control that activity; and have not removed, or disabled access to, known copyright infringing material from servers they control.”