January 26, 2012 | Online

Fallout from Megaupload bust

Last week, the US Department of Justice announced that it had charged the owners of popular file-sharing service Megaupload with online copyright infringement.

Seven people were indicted by a New York grand jury and charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering, and criminal copyright infringement.

The DOJ alleged that Megaupload, and its related sites, caused more than $1 billion in harm. It boasted 180 million registered users and saw more than 50 million daily visitors.

Megaupload Limited founder Kim Dotcom was arrested in New Zealand. He has been denied bail, pending his trial.

But the arrest affected more than just Megaupload and its users. Similar companies are reconsidering their role in the online file-sharing world.

X7.to has completely shut down its operation. Sites like UploadStation and FilePost no longer offer an affiliate and reward program; it is rumored both sites are aggressively deleting user accounts and files. Uploaded.to cannot be accessed via U.S. IP addresses. 4Shared has canceled its affiliate program.

Even well known FileSonic has disabled all sharing functionality on its site, noting "Our service can only be used to upload and retrieve files that you have uploaded personally."

Will the DOJ focus its resources on this one case and hope to make an example of it, or should these other companies be putting their lawyers on speed dial? Time will tell.

After Megaupload, Storage Sites Shutter Services [PC Magazine]