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File-sharing site indicted for Internet piracy; Shut down by U.S. officials

Megan Geuss and David Daw | Jan. 20, 2012, one of the Internet's most well-known file-sharing sites, was shuttered by federal officials Thursday, and its founder Kim Dotcom (formerly Kim Schmitz) and three other executives connected to the parent company MegaUpload Limited, were arrested in New Zealand.

The indictment called "a commercial website and service...that reproduces and distributes copies of popular copyrighted content over the Internet without authorization." The indictment also said employees and organizations affiliated with MegaUpload were part of a "Mega Conspiracy."

The indictment estimated that the infringements cost copyright holders up to $500 million in damages, while the company and its leaders reported incomes of more than $175 million. It also stated: "The site claims to have had more than one billion visitors in its history, more than 180,000,000 registered users to date, an average of 350 million daily visits, and to account for approximately four percent of the total traffic on the Internet."


According to the indictment,, established around 2005, was, at one point, the 13th most visited site on the Internet, and accounted for vast amounts of Internet traffic as users uploaded and downloaded music, movies, books, video games, and computer software. The site was unique among file-sharing sites in that it had the support of several high-profile celebrities (Kanye West and, among others appeared in a MegaUpload video posted on YouTube). The site has also been viewed primarily a way of sending files that are too large to be sent by email via the web site's hosting services.

The indictment stated that the incomes made by the company's executives came primarily from advertising revenues and "premium subscriptions" purchased by heavy users of the Megaupload service. "In exchange for payment, the Mega Conspiracy provides the fast reproduction and distribution of infringing copies of copyrighted works from its computer servers located around the world," prosecutors claimed.

The indictment of MegaUpload Limited cites several movies available for free on They range from "Lord of the Rings: the Fellowship of the Ring" to "Twilight Saga: Breaking Dawn- Part 1" and the location of the servers from which the movie was made publically available.'s indictment comes at a time when Congress is debating stricter copyright infringement laws--the Stop Online Piracy Act (SOPA) in the Senate and the Protect IP Act (PIPA) in the House.

The Associated Press reported that before the site was taken down, posted a statement saying allegations of piracy were "grotesquely overblown."


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