Megaupload And Hollywood’s Desperate Mega Moguls

To understand this week’s drama, with the bust of Megaupload, the latest file sharing monolith to go down, you must start by understanding the man behind the machine brought down by the U.S. feds and put into the custody of the New Zealand police under charges of criminal copyright infringement related to the MegaUpload site.  The site’s lead kingpin, Kim Schmitz aka Kimble aka Kim Dotcom, Kimble and Kim Time Jim Vesto, was born January 21, 1974 in Kiel, Germany.  His history as a young Internet entrepreneur reads like a bad made for TV Movie to visit cable any minute.

Destined for disaster, Kim’s police blotter shows his earliest antics getting him arrested for everything from computer fraud, to insider trading to embezzlement ( ) .

Background on the site shows this latest adventure may be one of the reasons why so many web based companies came down against Hollywood and the music moguls:

“In December 2011, Schmitz’s Megaworld (owner of Megaupload, Megavideo, Megalive and more) released its “Megaupload Song” promotional music video, which featured Kanye West,, Jamie Foxx, Sean “Diddy” Combs, Alicia Keys, Chris Brown and more lauding the service. Universal Music Group (UMG) responded by using the DMCA takedown process to have the clip removed from YouTube and other sites. Schmitz accused UMG of sending “illegitimate takedown notices”, since UMG did not own the song in question, and Megaupload went on to file a lawsuit against UMG.   A statement released by UMG claimed that a special arrangement exists between UMG and YouTube which allows UMG to take down any videos featuring their artists, regardless of copyright status.   This claim was later explicitly denied by YouTube, which has since reinstated the video.”

Yet while the web folks may have sympathy for file sharing sites, it is clear that the U.S. Feds treat these folks like terrorists with millions spent to bring them to trial, even though they could have simply shut them down for nothing.  According to the New Zealand press, “A total of 76 police and armed offenders squad officers were involved, as well as four FBI agents who assisted with the inquiry, but not the raid itself.”  The investigation began by the U.S. Justice folks in early 2011 and extradition to the U.S. is imminent according to the New Zealand police.  Lists of assets to be forfeited may explain the zealous year-long hunt for a chubby guy with a taste for the good life.

Timing is everything and it’s a bit unclear why now, after sitting back and watching for two years, the Feds decided to make this photo op now, unless they were trying to impress Hollywood: “This week has been the week of copyright warfare, but the decision to nuke the king copyright violator so spectacularly only goes to show how little the feds need bigger bombs,” writes Sam Biddle on the tech-scene site Gizmodo.

You may read the entire U.S. Justice Department and Grand Jury indictment here:  “Justice Department Charges Leaders of Megaupload with Widespread Online Copyright Infringement.“

Read entire piece here:

Unlike the U.S. Justice Department’s approach to the murdering and treacherous Mexican cartels, for which they gladly laundered money and supplied weapons and protection, law enforcement pulled no punches going after the portly Dotcom. Hollywood moguls and record company pimps continue to spend tons supporting our politicians and screwing recording artists and performing artists which never seem to get anyone’s attention but this is an election year and it’s an easy bet as long as they cough up bucks for the politicians, they will continue to have their way with them.

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Yet, today’s NYTimes paints a different picture of this scenario.  The opening line in their article says it all, “If Megaupload is guilty, then who among its brethren is innocent?”  Has Obama’s Justice department opened a can of worms that might go viral?  The pieces points out that, “MediaFire, RapidShare, YouSendIt, Dropbox and,” are equally vulnerable, and, “there are similar services from Amazon, Google and Microsoft.” And who knows how many cloud server farms hold files that violate the arcane copyright laws that are up for sale to the highest bidder?  \

According to the Times’ article, “Some of the recent concern among those in the tech industry about the Stop Online Piracy Act, or SOPA, was that it would permit the rapid shutdown of any site that had even a small amount of unauthorized copyrighted material on it, a big risk for sites that accept uploads from users. Backers of the legislation, which has been shelved for now, say it was aimed only at foreign sites that were primarily about piracy.”  Yet how will the Justice department parse the law?  Will it be based on how much of the data stored violates copyright laws, and will it throw out the baby with the bathwater as it’s obvious not all the files were in violation.  This will set back legitimate cloud farms that can’t possibly insure all the data they house meets Hollywood’s and the Justice department’s interpretation of who is responsible for policing the data that is out there on servers, personal computers and a myriad ensemble of storage devices.  I really want to see how they pull this off and who they arbitrarily decide to go after.

This is not to say that Dotcom and his pals and the file sharing folks are without allies:

“Soon after, websites for the Motion Picture Association of America, British record label representatives BMI and the US Copyright office were also targeted, as well as the sites belonging to the FBI and the White House. Tech website Gizmodo called it “easily the widest in scope and ferocity we’ve seen in some time”.

“It was in retaliation for Megaupload, as was the concurrent attack on,” said Anonymous operative Barret Brown.

“Mr Brown also said: “more is coming” and other members of Anonymous are pursuing a joint effort with others to “damage campaign raising abilities of remaining Democrats who support SOPA.”


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