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Mega: Privacy or Piracy?

On January 19th, 2012, the Federal Bureau of Investigation shut down the incredibly popular file-sharing site Megaupload.com. Within hours, the 13th largest website in the world—few competitors could actually compare themselves to the site, which had more than 150 million registered users, and accounted for a staggering four percent of all traffic on the Internet—was gone.

The end result? Charges against Megaupload and its executive staff, claiming they conspired to cause over $500 million in what the U.S. government called “harm to copyright holders” while raking in $175 million in illegal profits. Arrest warrants were executed on seven people (including Megaupload CEO and founder Kim “Dotcom” Schmitz), and two corporations as server farms around the world were forced to shut down their hosted content.

Responses to the shutdown varied. Intellectual property advocates celebrated the takedown, but “hacktivist” group Anonymous (fresh off a variety of web-based hijinks protesting the Stop Online Privacy Act (SOPA)) expressed their displeasure with a coordinated takedown of websites owned by large media corporations and the United States Department of Justice.

Regardless of the political fallout, other sites were all too happy to fill the void left by Megaupload’s fall. RapidShare, DropBox, and their file-sharing brethren quickly rose up like the fabled Hydra, with many new “heads” fighting to replace the one so inauspiciously lopped off by the U.S. government.

Nor was the cut quite as clean as the FBI and DOJ might’ve hoped. After winning his freedom, a portion of his confiscated assets, and a series of court verdicts in the wake of the Megaupload debacle, Kim Dotcom returned to the business of digital file sharing exactly one year after Megaupload was shut down. Perhaps unsurprisingly, it was an immediate success, becoming the largest website in New Zealand after only three days.

For his part, Dotcom is framing both the Megaupload case and his new business venture, Mega.co.nz, as part of a digital rights issue, rather than one of intellectual property. Whether such an argument will endure a judicial review, or transform the global perspective (and case law) on digital file access and management, is uncertain. But in the meantime, the heir to Megaupload’s dubious legacy continues to rack up traffic, subscribers, and news.

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