The US Department of Justice unsealed a summary of the evidence it has collected against Kim Dotcom, Megaupload, and other alleged conspirators on Friday. The 191-page document lays out details on how Megaupload and its associated sites, employees, and operations — termed the "Mega Conspiracy" — operated and, according to the DOJ, committed racketeering conspiracy, copyright infringement, and money laundering. The investigation concludes that Megaupload made over $150 million in revenues from premium memberships over the years, plus over $25 million in advertising revenues. Those revenues are said to be a direct result of Megaupload's willful promotion of copyrighted materials.
Perhaps the most interesting revelation from the document are details on the files stored for Megaupload and its users. According to the DOJ, when it shut down the site on January 19, 2012, there were roughly 14.9 million videos on Megavideo.com. Only 8.6 million of those videos were viewed at least once, with a total of 34.9 billion views for all of the videos. The document says that roughly 12.8 percent of all viewed videos had received at least one Digital Millennium Copyright Act take-down request. Additionally, the DOJ claims that 43 percent of all views on Megavideo.com — about 15 billion streams — were of content that had received a take-down notice. URLs uploaded by members with at least one take-down request against them accounted for roughly 78 percent of all streams, according to the DOJ.
Evidence claims 43 percent of all videos streamed on Megavideo.com likely infringed copyrights
Files uploaded by one of the site's top members, referred to as "TH" in the document, were responsible for 1.2 million downloads from 2006 to 2011. He allegedly made $50,000 through the site's Uploader Rewards program, even though his files received 1,200 take-down notices. Among the pile of evidence is an email communication from 2007 between Megaupload employees and alleged conspirators Mathias Ortmann and Bram van der Kolk that calls "TH" "one of our most important uploaders ... I don’t regret any of the dollars we send him every month."
Another major piece of evidence comes from "undercover" work done by an FBI agent to download, view, and monitor how Mega sites operated. His work involved downloading shows like Modern Family and movies like those in the Twilight saga. He also uploaded files for which the copyright holder then issued take-down notices, and he found that copyright holders could only stop individual URLs to files. Since Megaupload generated a new URL each time a user tried to upload a file already found on its servers, thousands of URLs could point to a single piece of infringing content. The DOJ claims that Mega deceived copyright holders into thinking that a takedown request would block the file while the only way to do so was to find and issue a request for every URL.
"191 pages of meritless criminal allegations."
The Justice Department uses the evidence to claim that Kim Dotcom and others involved with Megaupload are not protected by the Digital Millennium Copyright Act, which would give them "safe harbor" from copyright suits involving media uploaded to Mega sites by users. Specifically, the DOJ says they "do not meet these criteria because they are willfully infringing copyrights themselves; ... they have actual knowledge that the materials on their systems are infringing; ... they receive a financial benefit directly attributable to the copyright-infringing activity; ... they failed to terminate repeat infringers; and they have not removed, or disabled access to, known copyright-infringing material from servers they control."
The lawyer for Kim Dotcom and Megaupload tells Variety that the document is "191 pages of meritless criminal allegations," adding that "all those things are civil in nature and can never be considered criminal in the United States." Their defense hinges on the case being kept out of criminal court — "safe harbor" only applies to civil cases. Kim Dotcom and other defendants are currently in New Zealand fighting extradition to the US. The hearing in that case has been delayed to July 7th, 2014, according to Variety.
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