The Obama administration may not like the Hollywood-supported anti-piracy bills pending in Congress — but it showed today that it’s prepared to crack down on the pirates themselves. The Justice Department calls its attack on Megaupload — said to be the world’s largest file-sharing site — “among the largest criminal copyright cases ever brought by the United States.” Megaupload allegedly made $175M in criminal proceeds and cost content owners, including music and movie companies, $500M in lost revenue. Officials say that seven people and two corporations were involved in “racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.” New Zealand officials today arrested four Megaupload execs: founder Kim Dotcom (also known as Kim Schmitz and Kim Tim Jim Vestor), marketing chief Finn Batato, CTO Mathias Ortmann, and programmer Bram van der Kolk.
It will be interesting to see the ripple effect: Hong Kong-based Megaupload had been endorsed by celebrities including Kim Kardashian, Alicia Keys and Kanye West. The ad-supported site served as a locker for files considered too big to be emailed; the MPAA says that most of the content there was pirated. But prior to today Megaupload denied the charge: “The fact is that the vast majority of Mega’s Internet traffic is legitimate, and we are here to stay,” it said in a statement that had been posted on the site. “If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch.” Here’s the Justice Department’s release: (more…)