Such major file hosting services as Filesonic and Fileserve have begun shutting down or crippling their services out of fear that they may end up following Megaupload’s management in being extradited to the US to face charges of facilitating copyright infringement on a grand scale.
Both Filesonic and Fileserve have changed their service so users can only download the files they uploaded, making their sites effectively useless – at least for the uses to which the vast majority of users put them.
Minor sites such as FileJungle and UploadStation have also followed suit, and several have even shut down entirely rather than risk US extradition. One service, Uploaded.to, even went so far as to ban all US IPs from its site.
In addition, massive numbers of files and user accounts have apparently been deleted as part of efforts to clean up the services.
Scores of services are also cancelling their affiliate programs, in which they formerly offered money and rewards to top uploaders, presumably out of concern that such schemes are a major element of the Megaupload prosecutions.
The removal of key features has proven particularly galling to those users who were unwise enough to purchase premium accounts, as they have now been left with privilege of downloading only the files they take the trouble to upload at “unlimited speeds” with “no waiting.”
Other services are more confident, at least in public – RapidShare has been portraying itself as a legitimate file hosting service which respects copyright, rather than a mere source of direct downloads for pirates, calling itself “absolutely legal.”
As for Megaupload itself, its legal position appears very weak indeed – the indictment makes a slew of damaging allegations which look far from implausible, and the US government has apparently been carefully building a case against them for some time with the aid of an informant within their organisation.
The indictment includes internal company emails explicitly discussing how to give cash payments to users in order to encourage them to upload infringing material, and detailed accusations about how their file hashing system was used to exclude duplicated child pornography files but not duplicated pirated materials.
Although the “Safe Harbour” provisions of America’s “DMCA” law provide a fairly liberal set of protections for sites hosting content uploaded by users against being accused of abetting copyright infringement (allowing sites like YouTube to survive), most of them hinge on the site’s administrators taking action to remove files when requested and not encouraging or profiting from copyright infringement, which may prove to be Megaupload’s downfall.
However, rather than the collapse of commercial web-based file hosts causing users to give up their wicked downloading ways, it seems rather more likely they will merely shift back to the P2P and torrents they were using before the likes of Megaupload came along – presumably making things a little more inconvenient for downloaders is the objective of the exercise, as it seems unlikely to accomplish anything else.