Why the feds smashed Megaupload

Going after Megaupload, one of the most popular sites in the world, might seem a strange choice. (As an example of its scale, Megaupload controlled 525 servers in Virginia alone and had another 630 in the Netherlands—and many more around the world.) For years, the site has claimed to take down unauthorized content when notified by rightsholders. It has registered a DMCA agent with the US government. It has created an “abuse tool” and given rightsholders access. It has negotiated with companies like Universal Music Group about licensing content. But the government asserts that Megaupload merely wanted the veneer of legitimacy, while its employees knew full well that the site's main use was to distribute infringing content. Indeed, the government points to numerous internal e-mails and chat logs from employees showing that they were aware of copyrighted material on the site and even shared it with each other.

Because of this, the government says that the site does not qualify for a “safe harbor” of the kind that protected YouTube from Viacom's $1 billion lawsuit. In addition, the government contends that everything about the site has been doctored to make it look more legitimate than it is. The “Top 100” download list does not “actually portray the most popular downloads,” say prosecutors, and they claim that Megaupload purposely offers no site-wide search engine as a way of concealing what people are storing and sharing through the site.