So much for the blackout. Yesterday, the US Federal Government unsealed a massive indictment of numerous people and properties involved with file sharing hub Megaupload. All in all it seems 7 people were arrested, as well as 2-3 more still being on the lam, and large amounts of property and non-liquid assets were seized or frozen. At the center of it all is Kim Dotcom, aka Kim Schmitz, founder and head of MegaUpload, who was arrested in his mansion in New Zealand after sealing himself in a panic room with a sawed off shotgun. Police also seized Dotcom’s numerous classic cars, including a Benz with the license plate “GUILTY.”

Though the timing vis a vis the widespread content blackout in protest of SOPA/PIPA legislation is certainly suspect, the fact is that (without that legislation in place) the Feds would’ve had to have been working on this for a very long time, and likely would have executed these warrants sometime in the next 2 weeks anyway. That being said, as far as specific date choice, I doubt this was a coincidence. But wait, there’s more bad news. Now that we know the feds have been investigating MegaUpload (a site that, by the way, is responsible for 4% of the internets collective traffic) it can be surmised that they’re probably deep into building cases against other properties such as MediaFire and Rapidshare.

Kim “Dotcom” Schmitz

I wouldn’t be in the least bit surprised to see those sites go down in the coming month. After all, there’s no way that they’ve been avoiding the activities that got Megaupload busted. Basically the charges stem from supposed “evidence” that Megaupload was actively ignoring or impeding the reporting and removal of pirated content. Megaupload is perfectly allowed to host user-uploaded pirated content as long as that behavior is in no way encouraged, and if copyrighted content is reported or flagged it must be taken down immediately.

With the mind-bogglingly large amount of data that Megaupload hosts, moderation of that kind is monumentally difficult at best, and odds are they weren’t that interested in doing it anyway. Unfortunately, with a figure as ridiculous and conceited as Kim Dotcom at the head, and likely many similar personalities filling the upper echelons of Megaupload, they probably openly bragged about supporting piracy, and it was probably recorded by the government.

Schmitz in happier, more incriminating times

I’ve already heard that they have IM’s between Dotcom and another unnamed party where he talks about being a “modern day pirate.” That’s the type of shit that’s going to hurt. The weirdest thing though is how little this seems like a criminal case. The Feds keep referencing the potential amounts that Megaupload have deprived the entertainment industry of (apparently somewhere in the $500 million range, which seems more or less arbitrary to me). Because proof of each of those frauds is practically impossible to produce, this sounds to me like a civil suit or class action suit being carried out as a criminal case by the Federal Government.

Let me rephrase that: this sounds like the Feds working as entertainment corporation’s personal legal team. Uh-oh. The internet is none too happy about this, and Anonymous has predictably responded, DDOS’ing the DoJ website, the RIAA, Universal Music Group, and the MPAA. In the end, however, actions like that are minor annoyances (unless 4chan et al really decides to make their stand here, which I don’t think they will) and the real battle will be waged in the courts. Megaupload is a massive company that is incredibly profitable, so you’d best believe their legal team is rock solid. Make no mistake, this battle is just beginning. But nonetheless, it feels like the end of something. Later Megaupload. You were cool.

- Whole Milk