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Megaupload's office in Hong Kong - Source: Reuters -
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Arrests of Megaupload's executives were made as the debate over online piracy reaches fever pitch in the US, where Congress is trying to craft tougher legislation.
In New Zealand, some experts say shutting down sites like Megaupload are a stop-gap measure only that do little to fix the problem of illegal copyrighting.
Megaupload founder Kim Schmitz, also known as Kim Dotcom and three associates made a brief court appearance on Friday, where they were denied bail.
All associates face extradition to the US for their alleged role in Megaupload, which US Federal prosecutors say has cost copyright holders more than $620 million in revenue lost through pirated material.
US Justice Department officials have argued that the estimated economic harm to copyright holders cited in a US indictment was at the low end.
Dotcom and his co-accused Finn Batato, 38, Mathias Ortmann, 40, both from Germany, and Dutch national Bram van der Kolk, 29, will re-appear for a bail hearing at the North Shore District Court on Monday.
In Washington, lawmakers stopped anti-piracy legislation yesterday (NZT), postponing a critical vote in a victory for internet companies that staged a mass online protest against the fast-moving bills.
The movie and music industries want US Congress to crack down on internet piracy and content theft.
However internet giants, such as Google and Facebook, have complained that current drafts of the legislation would lead to censorship.
In New Zealand, one internet expert is urging people to think carefully about the US copyright laws that have forced the closure of Megaupload.
Internet New Zealand's chief executive Vikram Kumar said shutting Megaupload down does not solve the real problem, which is the failure of key players to keep pace with technology.
"This is all about controlling the content and the creativity and maximising the money, Hollywood and the music industry aren't willing to move on," Kumar said.
The move has contributed to enormous global demand for online file sharing, even though many Aucklanders appear unfamiliar with Megaupload.
But visitors familiar with Megaupload said they will get what they want elsewhere on line.
"It'll affect the less internet savvy people who don't understand other ways to get what they want but it won't affect me by any means," one visitor told ONE News.
The targeting of Megaupload's founders in Auckland follows similar anti-piracy operations in recent months in Greece, Germany and India but internet users say it is only a matter of time until a similar online entity crops up elsewhere.
"They were very large. It's very unlikely that they're re-emerge at the same size and in the same form," said Kumar.
On Friday, in a show of support, hackers attacked and temporarily disabled a number of US government and entertainment company websites, including the US Justice Department's website.
Top gun lawyer hired
The lawyer of former US President Bill Clinton has been hired to represent the Megaupload executives over the allegations that it illegally peddled copyrighted materials on its Megaupload.com website.
The allegations included copyright infringement as well as conspiracy to commit copyright infringement, conspiracy to commit money laundering and conspiracy to commit racketeering. Two of the offences carry a maximum penalty of 20 years.
Top American lawyer Robert Bennett said he will "vigorously defend itself", but declined to comment on the case in detail.
Bennett served as Clinton's attorney when he was accused of sexual harassment, and also defended the energy company Enron against accusations of corporate fraud.
He also represented former US Secretary of Defence Caspar Weinberger, during the Iran-Contra scandal of the 1980s and Paul Wolfowitz in the World Bank scandal.
Hong Kong raids
The companies charged, Megaupload Ltd and Vestor Ltd, were both registered in Hong Kong and owned either in large part or solely by Dotcom.
Some 100 officers raided four premises in Hong Kong on Friday including luxury hotel rooms, seizing computer equipment and freezing $US42.5 million in financial assets, according to Hong Kong Customs.
Megaupload has boasted of having more than 150 million registered users and 50 million daily visitors, according to the indictment.
At one point, it was estimated to be the 13th most frequently visited website on the internet.
Users could upload material to the company's sites which then would create a link that could be distributed. The sites, which included video, music and pornography, did not provide search capabilities but rather relied on others to publish the links, the US indictment said.
The Megaupload group used more than 1500 computer servers in Virginia, Washington DC, France and the Netherlands to host its sites, according to the FBI.
What do you think of the online piracy debate? Tell us your thoughts on the message board below.
Add a Comment:
Post new commentDochudson said on 2012-01-22 @ 13:40 NZDT: Report abusive post
Let's take this one step further which isn't a big one. Telecom and all other users know that most of the high volume downloads by it's users are for illegal downloads. So why aren't the phone companies being shut down? Shut down the real crims in Wall Street first.
Jono_P said on 2012-01-22 @ 12:07 NZDT: Report abusive post
If inflation occurs and and prices become unreasonable, then how so you expect a person to continue watching movies? Everything has to go down so the profit can go up. You must understand anybody would love a good deal, good deal = spending. Spending = profit for retailer + loyal customer. You must change the foundation upon which the system is built on before you change the paint.
cwizzy said on 2012-01-22 @ 11:14 NZDT: Report abusive post
Closing Megaupload will not stop, or even hinder piracy; with sites still up and running including Fileshare, Fileserve, Rapidshare, Wupload, Mediafire, and of course the classics of Piratebay, Demonoid, and KAT there is no way that pulling down one site is going to help. The Internet is not a place that is supposed to be controlled. If websites like the KKK and GodHatesFags can exist and voice their freedom of speech without Multibillion dollar companies lobbying the FBI; Megaupload should stay
thekiwi said on 2012-01-22 @ 10:14 NZDT: Report abusive post
If the movie and music industries stopped been greedy then there would not be need for download sites. They pay actors obsene amounts look at Charlie Sheen 2 million US dollars an episode. Millions spent on movies to make so for a family to go to the movies costs close to $50 so reduce the greed then no more problem
Dochudson said on 2012-01-22 @ 09:53 NZDT: Report abusive post
I am surprised the the NZ government has allowed the US government free and access to NZ to bully someone who provides a legitimate business. Is NZ and its people really that weak that they let the bullies to romp in and do what they want? Seriously, there are more pirates working for investment banks than picking on this company. The real Pirates work for Goldman Sachs.