Last week the celebrity-backed file sharing site, Megaupload, was taken down by the US Justice Department.  Along with the shutdown, arrests were made, which included Megaupload founder Kim Dotcom, Bram van der Kolk, Finn Batato, and Mathias Ortmann.

The four were charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering, and two substantive counts of criminal copyright infringement.  An unnamed source from the US Justice Department hinted that a fifth person had been arrested.  If convicted, they will be facing the maximum penalties of 20 years for conspiracy to commit racketeering and to commit money laundering, five years for each count of copyright infringement and five years for conspiracy to commit copyright infringement.

Dotcom plead “not guilty” to charges filed against him, but his request for bail was denied because of prior convictions, and was deemed as a flight risk by Judge David McNaughton. An appeal is said to be in progress.  An e-mail from Dotcom addressed to his New Zealand neighbors surfaced.  The e-mail was a confession of Dotcom’s dark past but also stated that he has turned a new leaf.

On the other hand, because of no prior convictions or fears of flight risk, Batato and Van der Kolk were granted bail.

A judge at the North Shore District Court postponed the bail hearing for Ortmann, scheduled today, until next week at the Manukau District Court after his lawyer asked the court for more time to prepare submissions.

The Effect On Cloud Services

Because of the take down, other file sharing sites shutdown their services or restricted access to their sites from US users.   FileSonic, Uploaded, UploadBox, x7.to, 4shared, FileJungle, UploadStation, FilePost, VideoBB, VideoZer are just some of the sites that made drastic changes.

MediaFire and RapidShare were quick to denounce any resemblance to Megaupload, stating that their services do not promote piracy and they comply with anti-piracy laws and disable accounts suspected of piracy as well as remove suspected pirated content from their database.

Other cloud services are confident that they would not be the next target by the Justice Department because they comply with the Digital Millennium Copyright Act (DMCA) but others are still concerned since Megaupload, who claimed adhering to the DMCA guidelines, with little evidence of DMCA guideline violations was still shutdown.
So the question remains, are cloud services really safe from the clutches of the Justice Department?

The Effect On Hackers

After Megaupload was taken down, hackers, led by Anonymous, went on a rampage and retaliated, taking down 10 government and entertainment sites, such as the Justice Department, FBI, RIAA, Universal Music etc.  This was then followed by an attack on CBC and Universal and the hacktivists warn that this is just the beginning.

Unfortunately, because of the popularity of Anonymous, hackers are now creating havoc under the Anonymous banner.  One hacker announced an attack on Facebook while another created a shady file sharing site.  Anonymous denied any connection or involvement with the two hackers and stated any attack on Facebook is not sanctioned by them and that AnonyUpload looks like a SCAM.

The Effect On Cloud Users

Because of the Megaupload debacle, users lost the files they had on the site and users, especially the legit ones, claim injustice.  The Pirates of Catalonia, in collaboration with and Pirate Parties International and other Pirate Parties [including the Pirate Party of the United Kingdom], stated that the FBI violated Articles 197 and 198 of the Spanish Penal Code by misappropiating personal data and will facilitate submission of class action lawsuit against the US authorities in as many countries as possible.

The Pirata.cat statement read: “Regardless of ideology, or opinions on the legality or morality of those running Megaupload, actions such as the closure of this service cause huge damage to lawful users of the sites and are unacceptable and disproportionate violations of their rights.”

“For these reasons, we ask that everyone spread the call to join this initiative, as actions like this one cannot and should not be forgiven.”