Tuesday, January 31, 2012

Ukraine's Ex.ua takedown!

Following a six month investigation initiated by international tech companies including Microsoft, Graphisoft and Adobe, Ukrainian authorities have shut down the popular file-hosting site Ex.ua. The police confiscated 200 servers on which more than 6,000 terabytes of data was stored. The Ex.ua raids follow less than two weeks after US authorities ordered the shutdown of another file-hosting service, MegaUpload.

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With millions of users, Ex.ua was one of the most visited sites in the Ukraine.

Founded in 2009, the file-hosting site allowed users to share files up to 50 gigabytes. Unlike similar services, Ex.ua was completely free to use. The site made money from advertisements and didn’t offer a paid subscription.

Because the site was widely used to share copyrighted files, several international companies including Microsoft, Graphisoft and Adobe filed complaints against the service. After a six month criminal investigation, this resulted in the shutdown of Ex.ua today.

A spokesperson for the authorities confirmed that the service was targeted and said that 200 servers were taken, holding a massive 6,000 terabytes of data.

In addition, sixteen employees were taken in for questioning. At the time of writing it is unclear how many arrests have been made, if any. The authorities did confirm that the site was run by a Latvian citizen.

While Ex.ua has some similarities to MegaUpload and other file-hosting sites, it was also crucially different in several aspects. Ex.ua allowed users to search for files and browse categories such as “MP3″ and “Video,” which is quite uncommon for a cyberlocker.

In 2010, the RIAA reported Ex.ua to the Office of the US Trade Representative, branding it a “pirate haven.” Among other things the RIAA highlighted that users of the site could not only upload, but also search for files on the site.

“This is the largest service in Ukraine and the vast majority of the Internet users in Ukraine use the site to download music and film content. None of the content made available on the site has been authorised by the copyright owners and the site operators are unresponsive to takedown notices as a result there are thousands of music titles available on the site,” the music group wrote at the time.

If found guilty, the operators of the site face up to five years in prison.

Ex.ua office

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Monday, January 30, 2012

What Piracy? The Entertainment Industry is BOOMING!

We’ve pointed it out numerous times in the past. Despite the rampant piracy, Hollywood and other entertainment industries continue to break revenue and sales records year after year.

In an excellent report commissioned by the CCIA, Techdirt’s Mike Masnick has has made an excellent overview of how well things go in the various entertainment industry sectors.

The report titled “The Sky is Rising” was presented at the MIDEM music business conference earlier today.
A summary of some of the key findings:

* According to MPAA, box office revenues grew 25 percent from 2006 to 2010 from $25.5 billion to $31.8 billion.

* Data from PricewaterhouseCoopers and iDATE show that from 1998-2010 the value of the worldwide entertainment industry grew from $449 billion to $745 billion.

* From 1999 to 2009 music concert sales in the US tripled from $1.5 billion to $4.6 billion

* Consumers’ choices growing as more movies are produced jumping from 5,635 films produced globally in 2005 to 7,193 in 2009.

* BLS data also show entertainment sector employment also grew 20 percent during that last decade and 43 percent for those identified as independent artists.

In addition to statistics, the report also lists many of the case studies that we’ve covered here at TorrentFreak, from Paulo Coelho to Louis CK.

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In large part, the report is meant to counter the entertainment industry claims that their businesses have been ruined by piracy, and that the Internet has to be monitored and censored.

“Unfortunately, it feels like much of the debate about copyright law over the past few decades has been based on claims about the state of an industry that simply don’t match up to reality,” the report reads.

“Rather than decrying the state of the entertainment industry today and seeking new laws to protect certain aspects of the industry, we should be celebrating the growth and vitality of this vibrant part of our economy — while consumers enjoy an amazing period of creativity.”

“We hope that this report will help shift the debate away from a focus on a narrow set of interests who have yet to take advantage of the new opportunities, and towards a more positive recognition of the wide-open possibilities presented by new technologies to create, promote, distribute, connect and monetize. We’re living in a truly amazing time for the entertainment industry, and it’s time that our national debate reflects that reality.”

Let’s hope so.

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Inaccurate anti-ACTA arguments

As Anonymous protests, Internet drowns in inaccurate anti-ACTA arguments
After the Internet's decisive victory over the Stop Online Piracy Act earlier this month, online activists have been looking for their next target, and a growing number of them have chosen the Anti-Counterfeiting Trade Agreement (ACTA), which was signed by the EU last week. Indeed, the renewed focus on ACTA even led a group of Polish politicians to hold paper Guy Fawkes masks—the symbol of Anonymous—over their faces in protest at the way ACTA has been pushed through. In the US, over 35,000 people have signed a petition urging the White House to "end ACTA," despite the fact that it has already been signed by the US.
At Ars Technica, we're as committed as anyone to defending free speech, fair use, and the open Internet against draconian new copyright laws. But it's important for the debate to be informed by accurate information. Unfortunately, many of the claims about ACTA that are circulating among the treaty's opponents are highly misleading or outright inaccurate. We've been covering ACTA for over four years, and hopefully we can shed some light on a tricky subject.
Much of the misinformation seems to come from the fact that the final text proved to be much less dangerous to Internet freedom than early drafts had suggested. Any number of controversial proposals were included, or rumored to be included, in early drafts of the treaty. But thanks in part to an intense public backlash, most of these provisions were stripped out, or at least watered down, in the final version of ACTA.
That final version has been publicly available for months, but many ACTA opponents continue to focus on these deleted provisions in their arguments against the treaty. We'll examine four of the most trenchant claims about ACTA that have been circulating on the Internet in the last week, then compare them to what ACTA actually says.
Polish parliamentarians protest ACTA
Polish parliamentarians protest ACTA

Four dubious claims about ACTA

Claim: "ACTA gives [ISPs] the power—or more accurately forces them—to monitor all your packets, all the time."
Reality: This is the most-repeated claim, and it's simply inaccurate. Nothing in the treaty appears to require ISPs to monitor their customers' traffic. While earlier versions of the treaty had proposed French-style "three strikes" measures, these proposals were dropped from the final version of the treaty. The closest ACTA comes to mandating ISP surveillance is section 27.3, which requires participating nations to "promote cooperative efforts within the business community to effectively address trademark and copyright or related rights infringement while preserving legitimate competition and, consistent with that Party's law, preserving fundamental principles such as freedom of expression, fair process, and privacy."
Forcing ISPs to actively monitoring their customers' traffic might be one way to comply with this requirement. Implementing a "three strikes" regime might be another. But there are also innocuous ways a country could comply, like holding conferences on copyright enforcement, sending literature to businesses encouraging them to respect copyright, and setting up an anonymous tipline for suspected copyright or trademark infringement.
Claim: "Can you imagine generic drugs that could save lives being banned? Can you imagine seeds that could feed thousands being controlled and withheld in the name of patents? This will become a reality with ACTA."
Reality: Section 3 of ACTA deals with the flow of infringing products across borders. It requires countries to allow customs officials to seize goods suspected of infringement. Such seizures would be allowed not only in the origin and destination nations, but also while the goods are in transit through third countries.
Critics argue that drug companies could use this provision to get generic drugs seized as they pass through third countries, even if the drugs would be legal under the patent system of the destination country. Similarly, they worry that genetically-modified, and patent-encumbered, seeds would be seized as they were shipped across borders. But footnote 6 of the treaty states that "patents and protection of undisclosed information do not fall within the scope" of section 3.
There have been isolated cases of generics being seized on trademark grounds because they too closely mimicked the appearance of the corresponding name-brand drug. (Think of Nexium, for example, which is marketed as the "purple pill.") But at worst that would require the manufacturers of generics to tweak the appearance of their drugs to avoid infringing on trademarks.
An in-depth report on the impact of ACTA on generic medicines found that the treaty "makes enforcement of intellectual property rights in courts, at borders, by the government and by private parties easier, less costly, and more 'deterrent' in the level of penalties. In doing so, it increases the risks and consequences of wrongful searches, seizures, lawsuits and other enforcement actions against legitimate suppliers of generic medicines." So at the margin, ACTA might be bad for the flow of generic drugs to poor countries, but it's a huge exaggeration to say that generic drugs would be "banned."
Claim: ACTA "obliges its signatories to take on many of the worst features of SOPA and PIPA." It's "the European version of the US SOPA and PIPA rolled into one and cranked up to 11."
Reality: The provisions of SOPA and PIPA that generated the most outrage were those that would have blacklisted sites from DNS, search engines, payment networks, and ad networks. None of these proposals were included in ACTA. Perhaps this is a reference to the provisions requiring signatories to "promote cooperative efforts within the business community," but as we've seen, there are any number of ways to comply with this requirement that are less draconian than the SOPA provisions that generated so much controversy.
As respected Canadian copyright scholar (and longtime ACTA critic) Michael Geist has put it, "from a substantive perspective, ACTA's Internet provisions are plainly not as bad as those contemplated by SOPA. Over the course of several years of public protest and pressure, the Internet provisions were gradually watered down with the removal of three strikes and you're out language. Other controversial provisions on statutory damages and anti-camcording rules were made optional rather than mandatory."
Claim: "ISPs will be required to constantly check that no copyrighted material, or links to copyrighted material, are found on their servers... Even parts of sentences could be protected and made prescripted by copyright."
Reality: These claims come from a video that was produced by Anonymous; while the group's many "members" are concerned about censorship and copyright maximalism, the video itself is full of erroneous claims. The video has been embedded by outlets that should know better, like The Atlantic, and it has been viewed half a million times.
For the record, nothing in ACTA appears to require sites to constantly monitor user-generated material for infringing material. And we have no idea how ACTA could be interpreted as bringing "parts of sentences" under copyright protection.

ACTA is a bad agreement

None of this is to say ACTA is positive. It isn't. It has both procedural and substantive problems—and critics need to attack it on the right grounds.
ACTA was negotiated in extreme secrecy by a small group of wealthy nations. As leaked documents make clear, the explicit goal of this approach was to bypass existing international instituions like WIPO where other countries might object to even stricter IP enforcement. Instead, ACTA was a "coalition of the willing" which "would aim to set a 'gold standard' for IPR [intellectual property rights] enforcement among a small number of like-minded countries, and which other countries might aspire to join."
As for the secrecy, even some participants found it unsettling. The EU's top negotiator on ACTA even told US embassy official in Sweden that "the secrecy issue has been very damaging to the negotiating climate in Sweden… The secrecy around the negotiations has led to the legitimacy of the whole process being questioned."
In the US, ACTA was dubbed an "executive agreement" rather than a "treaty," which allowed negotiators to skip the ordinary Senate ratification process. If ACTA becomes a binding part of international law, it will create a precedent for future treaties that avoid basic principles of transparency and democratic accountability.
On the merits, the problem with ACTA is less that it would require changes to American or European law as that it would become another mechanism for Western governments to force poorer countries to adopt bad copyright policies. For example, the treaty requires signatories to adopt anti-circumvention rules similar to those in the American DMCA, and a regime of statutory damages like the one that produced a $1.5 million judgment against Jammie Thomas-Rasset for infringing 24 songs. Once ACTA is adopted by wealthy countries, the US government is likely to make its adoption a factor in its Special 301 report, which lists countries Washington regards as having insufficiently strong copyright laws. Thanks to this kind of arm-twisting, copyright treaties that are adopted in the US and Europe are eventually foisted on the rest of the world.
More generally, the treaty continues the one-way ratchet toward ever-stronger copyright protections. ACTA establishes a new, higher minimum of copyright protections and enforcement that countries must provide, but it doesn't require countries to preserve mechanisms like fair use and intermediary immunity that protect intellectual freedom.
If Congress ever decides that IP rights have swung too far in one direction, it can always rebalance them by changing the law, right? Not exactly. International agreements like ACTA bind the hands of legislators unless the US is willing to withdraw from them first.
That's why Rep. Darrell Issa (R-CA) last week called ACTA "more dangerous than SOPA." He added, "It’s not coming to me for a vote. It purports that it does not change existing laws. But once implemented, it creates a whole new enforcement system and will virtually tie the hands of Congress to undo it."
Unfortunately, these arguments are hard to explain to the general public. So too many ACTA opponents are, perhaps unknowingly, attacking ACTA for provisions that aren't in the treaty. We're not going to shed too many tears if this misinformation helps to kill a bad treaty, but we'd rather win the debate honestly—and prepare people for the upcoming ACTA sequel.

(Source)

MegaUpload User Data Soon to be Destroyed

MegaUpload has received a letter from the US Attorney informing the company that data uploaded by its users may be destroyed before the end of the week. The looming wipe-out is the result of MegaUpload’s lack of funds to pay for the servers. Behind the scenes, MegaUpload is hoping to convince the US Government that it’s in the best interest of everyone involved to allow users to access their data, at least temporarily.
In the wake of the MegaUpload shutdown many of the site’s users have complained about the personal files that were lost as collateral damage.

From work-related data to personal photos, the raid disabled access to hundreds of thousands, perhaps millions, of files that are clearly not infringing. A recent announcement by the US Attorney now suggests that these files may soon be lost forever.

“We received a letter very late Friday from the US Attorney that declared there could be an imminent destruction of Megaupload consumer data files on this coming Thursday,” MegaUpload lawyer Ira Rothken told TorrentFreak.

Rothken explains that MegaUpload is determined to protect the interests of its users, but that its hands are tied without help from the authorities. The looming data loss is linked to unpaid bills at Cogent Communications and Carpathia Hosting where MegaUpload leased some of its servers.

“We of course would like to think the United States and Megaupload would both be united in trying to avoid such a consumer protection calamity whereby innocent consumers could permanently lose access to everything from word processing files to family photos and many other things that could never practically be considered infringing,” the lawyer told TorrentFreak.

“Megaupload’s assets were frozen by the United States. Mega needs funds unfrozen to pay for bandwidth, hosting, and systems administration in order to allow consumers to get access to their data stored in the Mega cloud and to back up the same for safekeeping.”

MegaUpload has contacted the US Attorney’s office with a request to unfreeze assets including money and domains so users can get access to their personal data. If this doesn’t happen, the consequences for many MegaUpload users and the future of other cloud hosting services will be disastrous.

“If the United States fails at helping protect and restore Megaupload consumer data in an expedient fashion, it will have a chilling effect on cloud computing in the United States and worldwide. It is one thing to bring a claim for copyright infringement it is another thing to take down an entire cloud storage service in Megaupload that has substantial non infringing uses as a matter of law,” Rothken told us.

Meanwhile, MegaUpload users are also taking action themselves. Last week Pirate parties worldwide began making a list of all the people affected by the raids, and they are planning to file a complaint against authorities in the US. The EFF has also taken an interest in the issue, and is sharing data with the international Pirate parties.

For now, however, the more urgent matter is to ensure that the data doesn’t get destroyed.

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Sunday, January 29, 2012

Hacking stunt: Stealing smartphone crypto keys using plain old radio

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Encryption keys on smartphones can be stolen via a technique using radio waves, says one of the world's foremost crypto experts, Paul Kocher, whose firm Cryptography Research will demonstrate the hacking stunt with several types of smartphones at the upcoming RSA Conference in San Francisco next month.

"You tune to the right frequency," says Kocher, who described the hacking procedure as involving use of a radio device much like a common AM radio that will be set up within about 10 feet from the smartphone. The radio-based device will pick up electromagnetic waves occurring when the crypto libraries inside the smartphone are used, and computations can reveal the private key. "We're stealing the key as it's being used," he says, adding, "It's independent of key length."

Kocher says the goal of the hacking demo, which Cryptography Research will demonstrate throughout the RSA Conference at its booth, is not to disparage any particular smartphone manufacturer but to point out that the way crypto is used on devices can be improved.

"This is a problem that can be fixed," he says, noting Cryptography Research is working with at least one of the major smartphone makers, which he declined to name, on the issues around these types of radio-based attacks.

 

Music Business Tunes for Next Copyright Fight

After the SOPA defeat, the music industry assembles a wish list to boost legal protection, despite soaring digital revenues.
If you've been worried about the financial health of the music business, especially since last Friday, when Congress shelved indefinitely the SOPA and PIPA bills music-business moguls were counting on to halt the global pilfering of their products and profits, you can stop.

The music business is actually in pretty decent shape. Much better shape, in terms of digital sales, than any other part of the entertainment business, according to execs at the Record Industry Association of America (RIAA), the industry's professional association, Washington lobbyist and apologist.

During 2011, the number of consumers using paid subscription services rose 65 percent to 13.4 million, according to a tweet from Jonathan Lamy, SVP of communications for the RIAA, who was passing along the good news from a new report issued byIFPI (International Federation of the Phonographic Industry), the global version of the U.S.-based RIAA.

Paid digital music services are up and running in 58 countries, bringing in $5.2 billion in revenues, Lamy also pointed out via tweet.

Total revenue from digital music sales is up only 8 percent compared to 2010, but the number of countries in which digital music services sell it went up 242 percent between 2010 and 2011, from 24 countries in 2010 to 58 in 2011, according to Cara Duckworth, VP of communications for the RIAA, who was also quoting IFPI figures.

"W/more than half of all music sales coming from digital services, we know how Internet works. "Music=Innovation. Declare THAT. #CES #SOPA," Duckworth tweeted.

The news gets better, at least for the music business.

Key findings of IFPI study on music-industry digital revenues and health:
  • Demand for downloaded digital albums went up 24 percent;
  • The number of subscribers to paid digital music services rose 65 percent to 13.4 million;
  • A "Hadopi" anti-piracy law in France gets credit for cutting content piracy by 26 percent in 2011;
  • The number of people downloading music from P2P services dropped by 2 million in France in 2011 due to Hadopi;
  • One in four digital-music consumers "regularly access unlicensed services;"
  • The 8 percent increase in digital-music revenue is the first year-to-year growth in digital music since IFPI began tracking it in 2004;
  • Digital downloads now account for 32 percent of record company revenues globally, up from 29 percent in 2010;
  • In some countries digital music makes up more than half of record-company revenues, including the US (52%), South Korea (53%) and China (71%).
  • In 2011 consumers paid for 3.6 billion pieces of downloadable music, 17 percent more than in 2011.
Record companies are building a business in digital music "in spite of the environment in which they operate, not because of it," according to Frances Moore, chief executive of IFPI, in a statement (PDF) that accompanied the report.

Record companies are working with ISPs, search engines, governments, and law-enforcement agencies to reduce the number of illegal downloads and ensure that an ever-higher percentage of the music that is downloaded is bought legally, she wrote.

"Our digital revenues, at one-third of industry income (and now more than 50 per cent in the US), substantially surpass those of other creative industries, such as films, books and newspapers,"

Which just begs the question about SOPA and PIPA: If the music industry is doing so well, why is it so important that Internet-censoring, consumer-incriminating, Constitution-violating new laws like SOPA and PIPA be passed quickly and without much debate?

Is it because adding new laws that put all the burden of enforcement on companies or individuals other than the copyright holders, especially when the copyright holders are raking in money hand over fist, seems gratuitous? Excessive? Just plain rude?

Maybe.

Maybe it's just because RIAA wants its cake and to eat yours, too.

Within all the good news about how much more money RIAA members are making were a series of demands (ably summarized by Ars Technica) the IFPI and RIAA believe the industry needs to be able to put the appropriate amount of pressure and assumption-of guilt on their customers:

RIAA/IFPI Legislative Priorities
  • Graduated response laws (punishment graduated according to grievousness of the offense. (Grievousness refers to the number of illegal music files, not how bad they are. They're not promoting laws that carry greater penalties for downloading Justin Bieber, for example. Unfortunately.)
  • Site blocking: everyone should block sites RIAA and IFPI have decided are detrimental to their business and not ask questions about how they came to that conclusion.
  • Search engines should be required not to search for things music execs don't want them to search for (repeat the part about 'no questions' from item No. 2).
  • Credit-card and other payment processors should cut off those accused of hosting illegal downloads, or downloading music illegally, even when (usually) payment processing had no part in those transactions.
  • Ad networks should cut off pirates – MegaUpload and its ilk shouldn't be able to profit from ads.
  • Mobile operators should also try to punish illegal downloaders by monitoring their customers' traffic to identify and cut off files RIAA and IFPI believe customers shouldn't be able to access.
  • Lawsuits. More lawsuits against big downloaders.
All those demands are shaped as public priorities that support public safety and prosperity, even though none of them have anything to do with either of those things.

If they're passed into law and other people are forced to enforce copyrights owned by music producers, the only thing producers have to do is occasionally post onto sites other companies pay to maintain new content other people (bands) write and produce, and rake in money other people (consumers) pay to download.

How much better is that than the days when record companies had to actually produce records, promote them, ship physical media around the world and get people to buy and play it? Think how much effort went into convincing people to throw out their record players, buy CD players and re-buy all those albums they'd been collecting?

Think the industry wants to go to that much trouble again? Absolutely not.

At first, from the perspective of public policy, ethics, Constitutional law and avoiding the coddling of greedy idiots, none of the RIAA's political positions makes any sense.

From this perspective – the desire to profit even more by doing even less – it all makes sense. Not for anyone other than a few dozen executives in the record industry, of course. Certainly not for the Internet companies, law enforcement agencies, customs agencies and other organizations that would be doing all the work for music publishers without any of the profit.

But if your point of view is so narrow and ethics so warped that it makes sense to not only overcharge, but abuse, insult and belittle your customers for the small amount of work you have to do for a large amount of money, sure. It all makes sense. 2012 will be a good year for 2012. The rest of us will be paying enough money in enough different ways to be sure of it, at least if the RIAA gets its way.

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The Moral Battle Between Pirates and Copyright Lobbyists

In a recent interview, Harvard Professor Yochai Benkler raises some serious concerns surrounding the MegaUpload bust.

One question raised by the professor, which may not have been entertained by many prior to the wide public opposition to SOPA, is of whether the lobbyist companies currently reaping the benefits of increasingly harsher copyright enforcement confer a strong moral cause for government interference of free market innovation. When a Harvard Professor of Entrepreneurial Legal Studies raises these concerns, perhaps it is time we stop and consider this.

I have to say that, given the limited time he had to work with, I am very impressed with Prof. Benkler’s ability to address many important issues surrounding the MegaUpload case in such a succinct manner. Lack of due process. The legal targeting of an entire industry and the effect that has on the free market. While these topics are deserving of in depth scrutiny on their own, it was the moral issue raised at the end that caught my attention.

Now, I don’t generally like to argue morals because they tend to get a bit sticky with each party holding fast to whichever beliefs they identified themselves as before any debate even begins. How do you decide whose morals are right and whose are wrong?

Do you go by the majority rule? As Benkler stated:

“The moral authority of the networked public is on a different plane than the moral authority of lobbyist companies and that’s an enormous power to be reckoned with.”

This is clearly reflected by the 71% of recently polled Americans who feel that censorship is a far worse threat to society than piracy. The millions of people who contacted their government officials in protest of SOPA censorship was so overwhelming, I nearly took for granted that it needs mention.

Something else struck me about this moral when he gave his closing statement.

“It’s critically important that this new political force be focused on what will build a network that supports the industry in its legitimate needs, not in it’s overstated fears of piracy, for which there is no real data.”

This is something that had occurred to me only recently. If all practical reasons or perceived “bogey man” type threats surrounding the word “piracy” are discounted, then there is not much left to look at other than the moral cause for such extreme legal action. Is there even a moral basis to be found here? Is there a moral excuse for an open legal attack on a rather young industry which had found a popular niche in the marketplace?

Unfortunately, this is not something I can argue for because no matter how hard I try to play devil’s advocate for the legal authorities involved, I can not see a moral motive behind their willingness to take such extreme action on behalf of copyright lobbyists. It is really difficult for one to see anything beyond greed or ignorance as the underlying motive here. Please, I challenge you to raise some moral support for the general attack on innovation by these lobbyists. Just give me one moral argument that has not already been completely refuted. Those of us who have paid close attention to these issues just can’t spend any more time explaining why file-sharing does not equal theft.

There is no strong practical or moral argument to justify the tremendous money and resources that go into preventing innovative companies from settling their own business conflicts with the established industry in a civil (not criminal) court of law. That said, Prof. Benkler is right. It is time to focus on what is best for society as a whole. Granted, that includes even the lobbyists who insist that we drag them kicking and screaming toward progress.

It’s not that we hate you, lobbyists. It’s just that, you know, things have been kind of rough for the rest of us lately and we could really use new industries, jobs and the many benefits that the internet actually offers us in spite of you. It is a great time to take a look at the solutions and benefits that lie in wait for us all. This type of progress is inevitable and the rest of the world has a moral duty to see it meet our common needs instead of waiting around for the industry to keep up.

This is a guest post from Ryan Smith, aka Green Pirate.

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Thursday, January 26, 2012

Megaupload case is getting weird to say the least



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A tank like this one from Rusbal's Rusdecoy line sat on the front lawn of Dotcom Mansion

Flight risks, firearms charges and an inflatable tank are just some of the latest wrinkles in the bizzare case of Megaupload founder Kim Dotcom. After his arrest, Dotcom's mansion received delivery of a full-size inflatable replica of a Russian T-72 tank, which is now parked in front of the "Dotcom Mansion" and is busy infuriating the upscale neighbors. The T-72 "Threat Decoy" is similar to those used by the military for field training and intelligence deception, manufactured by companies such as Inflatable Images in the US and Russia's Rusbal; each sells for thousands of dollars.

The New Zealand Herald also reports that Judge David McNaughton, who is presiding over the extradition hearing for Dotcom and his associates in Auckland, denied bail to Dotcom based partially on secret evidence regarding the "porous nature" of New Zealand's borders and how easily someone like Dotcom could slip away—even with electronic monitoring. The judge said that "with sufficient determination and financial resources, flight risk remains a real and significant possibility." Because Dotcom has already obtained passports under three names, there was concern that he could easily obtain a false passport through "criminal connections" to sneak out of the country by sea or by small plane.

The judge did grant bail to Megaupload chief marketing officer Finn Batato, a long-time associate of Dotcom dating back to his German security firm DataProtect (Batato was a co-star of Dotcom's "Kimble Goes Monaco" movie); he also approved bail for Bram van der Kolk, a lead programmer for the company. Mathias Ortmann, another longtime associate of Dotcom from his DataProtect days—who was credited in Dotcom's Monaco adventure extravaganza under the nickname "Scuzzy"—is also being held, pending more submissions on his behalf for bail. Batato and van der Kolk's bail carries a ban on owning or using a device capable of connecting to the Internet.

A $2.5 million discrepancy in Ortmann's income information is part of the problem. Ortmann reportedly made $14.5 million from Megaupload between 2005 and 2010, and $3 million in 2011. However, his bank records show income of $20.2 million over the same period.

A 2007 Skype text chat between van der Kolk and and Ortmann was included in material presented to Judge McNaughton. In the conversation, van der Kolk wrote that "if the shit really hits the fan….would (Dotcom) grab the last bit of money and take off…he's good at that." Attorney for the Crown Anne Toohey used the statement as proof of the mistrust of Dotcom among his associates and an indicator of what he might do if released on bail. Dotcom's lawyer, Paul Davidson, said that the conversation had been taken out of context and that his client had no desire to be a fugitive.

Meanwhile, Dotcom's head of security, Wayne Phillip Tempero, is facing firearms charges for providing Dotcom with the semi-automatic shotgun which was found in Dotcom's safe room when police cut their way in during his arrest. Tempero said that the gun had been purchased under a valid New Zealand license, and Davidson told the court that the saferoom and gun were for the safety of Dotcom's family. Dotcom's wife Mona is a former model from the Philippines, and Davidson explained that kidnapping of the rich and famous was common there—so the guns, the bodyguard, and the saferoom were needed as protection from that threat.

There was no mention of the inflatable tank.

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Megaupload users planning to sue FBI

In most reports following the MegaUpload shutdown, the site is exclusively portrayed as a piracy haven.

However, hundreds of thousands, perhaps millions of people used the site to share research data, work documents, personal video collections.

As of today, these people are still unsure whether they will ever get their personal belongings back.

In a response, Pirate Parties worldwide have started to make a list of all the people affected by the raids, and they are planning to file an official complaint against the US authorities.

“The widespread damage caused by the sudden closure of Megaupload is unjustified and completely disproportionate to the aim intended,” they announce.

For this reason Pirates of Catalonia, in collaboration with Pirate Parties International and other Pirate Parties, have begun investigating these potential breaches of law and will facilitate submission of complaints against the US authorities in as many countries as possible, to ensure a positive and just result.”

“This initiative is a starting point for legitimate internet users to help defend themselves from the legal abuses promoted by those wishing to aggressively lock away cultural materials for their own financial gain.”

MegaUpload users who want to join in on the action can do so here.

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Tuesday, January 24, 2012

Congress should return dirty MPAA money!

On Sunday we reported on a “we the people” petition asking the White House to investigate the MPAA’s alleged bribery practices.

Today the petition reached its goal of 25.000 votes, but that’s not the only pressure that Washington is facing over the issue.

Before the Obama Administration has a chance to respond to the petition, several citizen rights groups are gearing up to put pressure on Congress to return “Hollywood’s dirty money”.

“The MPAA is so brazen in its efforts to buy legislation with campaign cash that its leader, himself a former senator, sees nothing wrong with threatening legislators on national TV,” said Free Press Action Fund President Craig Aaron today.

“We think it’s time that Congress showed that its votes are no longer for sale. The first thing Congress must do is give back the MPAA’s tainted campaign cash or give it to charity. Congress must make it clear to the world that it won’t be bullied into supporting censorship.

Now that various congressmen reconsidered their positions on the controversial PIPA and SOPA bills, Free Press thinks they are ready for the next step.

“Last week’s unprecedented grassroots uprising, in which millions mobilized against the Stop Online Piracy Act and the PROTECT IP Act , clearly got Washington’s attention. And we’ve since seen dozens of legislators scrambling to show they were really against these bills all along. But the real test is whether they will put their money where their mouths are by returning Hollywood’s dirty money,” Aaron concludes.

It will be interesting to see how Congress responds to this call for refunds.

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Was there more to Megaupload bust?

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Last Thursday the US Justice Department came down hard on Megaupload and its mega founder, Kim Dotcom. In the days since, there has been a shake-up of sorts in the digital storage realm. Several smaller sites have drastically changed their business models. Others, like MediaFire, reached out to me after I published this post attempting to distance themselves from Megaupload.
However, yesterday, a new theory surfaced that indicates Megaupload’s demise had less to do with piracy than previously thought. This theory stems from a 2011 article detailing Megaupload’s upcoming Megabox music store and DIY artist distribution service that would have completely disrupted the music industry.

TorrentFreak first reported about the service in early December 2011. Megabox was just in beta at that time with listed partners of 7digital, Gracenote, Rovi, and Amazon. Megaupload was in a heated marketing battle with the RIAA and MPAA who featured Kim Dotcom in an anti-piracy movie (5:10 mark). The site had just sued Universal Music Group for wrongly blocking Megaupload’s recent star-studded YouTube campaign. Things were getting vicious in December but the quiet launch of Megabox might have been the straw that broke the millionaire’s back.

Dotcom described Megabox as Megaupload’s iTunes competitor, which would even eventually offer free premium movies via Megamovie, a site set to launch in 2012. This service would take Megaupload from being just a digital locker site to a full-fledged player in the digital content game.

The kicker was Megabox would cater to unsigned artists and allow anyone to sell their creations while allowing the artist to retain 90% of the earnings. Or, artists could even giveaway their songs and would be paid through a service called Megakey. “Yes that’s right, we will pay artists even for free downloads. The Megakey business model has been tested with over a million users and it works,” Kim Dotcom told TorrentFreak in December. Megabox was planning on bypassing the labels, RIAA, and the entire music establishment.

Megaupload was likely large enough to actually find success. Other services have tried what Megabox was set to do, but Megaupload was massive. Prior to its closure last week, the site was estimated to be the 13th most visited site on the Internet, accounting for 4% of all worldwide Internet traffic. It boasted 180 million registered users with over 50 million visiting the site daily. Megaupload was already a seemingly trusted service for artists to distribute their work. Megabox would have a monetized that popularity by passing on the bulk of the earnings back to the artists.

“You can expect several Megabox announcements next year including exclusive deals with artists who are eager to depart from outdated business models,” said Dotcom late last year. But that’s probably not going to happen. Kim Dotcom and several other Megaupload executives are now awaiting trial on various charges including racketeering, money laundering, and various counts of piracy. It seems they flew too close to the sun. High on success and a half a world away in New Zealand and Hong Kong, they attempted to take on the music industry head-on. Now they’re in jail.

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(source)

Sunday, January 22, 2012

The drama of megaupload

The frequent developments in the online piracy case may be hard to keep up with, so here's a roundup.File-sharing website Megaupload has been swept up in so much drama lately it is beginning to rival a soap opera.The frequent developments in the online piracy case may be hard to keep up with. So, here's a roundup.The SiteOn Jan. 19, the U.S. Justice Department and FBI shuttered Megaupload and had the company’s founder and other executives arrested in New Zealand for "massive worldwide online piracy." Founder Kim Dotcom and three others appeared in court Friday and were denied bail.The hacker group Anonymous retaliated for the arrests by claiming responsibility for taking down websites run by Universal Music, the Justice Department and the Recording Industry Association of America. At the same time, bad guys were trying to take advantage of the situation by creating fake Megaupload sites so they could phish people.The BustDotcom, also known as Kim Schmitz and Kim Tim Jim Investor, spent his 38th birthday on Saturday in a New Zealand jail. But he didn't go quietly.Details of his arrest are now coming out. Apparently, it was a dramatic, high-tech stand-off when dozens of New Zealand police backed by helicopters swarmed Dotcom's barricaded mansion to arrest him on Friday. Dotcom refused them entry and police had to cut their way through electronic locks to a safe room, where they discovered him with a sawed-off shotgun."Despite our staff clearly identifying themselves, Mr Dotcom retreated into the house and activated a number of electronic-locking mechanisms," Detective Inspector Grant Wormald from the Organised and Financial Crime Agency New Zealand told Reuters.With Dotcom in cuffs, officers then began seizing things -- two guns, computers, documents and vehicles, lots of them. Personalized number plates on 20 or so seized vehicles included KIMCOM, HACKER, STONED, GUILTY, MAFIA, GOD and POLICE.The MediaYou wouldn't think it a believable story, but it turns out there were weird nuggets underlying The New York Post's claim that musician and producer Swizz Beatz was CEO of Megaupload. However, the top lawyer for Megaupload now says that Beatz was never officially the company's chief executive, reports VentureBeat."To my knowledge, Swizz Beatz was never involved in any meaningful way," Megaupload attorney Ira Rothken said, adding, remarkably that "He was negotiating to become the CEO, but it was never official." Beatz' publicist had earlier said Beatz was the CEO. Beatz was also briefly listed as CEO on Megaupload.com.Media companies say the legitimate uses of sites like Megaupload are a veil concealing extensive theft but that doesn’t stop big-time stars, including Beatz’ wife, R&B singer Alicia Keys, from promoting it. Check out this video, which the Universal Music Group had the video taken down from YouTube, despite having no claim to the content. It has since been reinstated. View: Original Article

Bribery in sopa/pipa (who would have believed)?

The public has started a petition asking the White House to investigate comments made by MPAA CEO Chris Dodd a few days ago on Fox News. Closing a tumultuous week of wide protest against PIPA and SOPA – two MPAA backed anti-piracy bills – Dodd threatened to stop the cash-flow to politicians who dare to take a stand against pro-Hollywood legislation. Clear bribery, the petition claims, and already thousands agree.Responding to the mass protests against the PIPA and SOPA bills on Wednesday, the MPAA has revealed its true nature.First, MPAA CEO Chris Dodd described the blackouts of Wikipedia, Reddit and others as corporate PR stunts which manipulated and exploited the sites’ users.“Some technology business interests are resorting to stunts that punish their users or turn them into their corporate pawns,” Dodd said.Then, a few days later when many lawmakers had already dropped their support for the anti-piracy bills, the MPAA’s comments turned even more grim. Talking to Fox News, the MPAA’s boss threatened to stop contributing to politicians who don’t back legislation designed to protect Hollywood.“Those who count on quote ‘Hollywood’ for support need to understand that this industry is watching very carefully who’s going to stand up for them when their job is at stake. Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake,” Dodd said.Although it’s no secret that the movie industry has a powerful lobby in Washington, explicitly admitting that bribery is one of the tactics the MPAA uses to have their way wasn’t well received by the public. A few hours ago a White house petition was started to investigate Chris Dodd and the MPAA for alleged bribery.“This is an open admission of bribery and a threat designed to provoke a specific policy goal. This is a brazen flouting of the ‘above the law’ status people of Dodd’s position and wealth enjoy,” the petition reads.“We demand justice. Investigate this blatant bribery and indict every person, especially government officials and lawmakers, who is involved.”In just a few hours the petition amassed more than 5,000 votes and this number is increasing rapidly. As a former Senator, Chris Dodd has many friends in Washington so it’s unclear whether the petition will accomplish anything, but if the numbers grow big enough the White House won’t be able to ignore it either.The MPAA’s response to the PIPA and SOPA opposition this week is a sign that they might be losing control in Washington. At the very least, they are starting to lose their patience and become frustrated, which may not help their cause at this point. View: Original Article

Friday, January 20, 2012

Founder of Megaupload denied bail

The founder of MegaUpload, Kim Dotcom, has been denied bail in an extradition hearing in New Zealand this morning. Dotcom, who was raided by 76 armed police in helicopters yesterday, is wanted in the United States alongside other key MegaUpload employees on racketeering, copyright infringement and money laundering charges.

The drama and fallout from yesterday’s raids against the infrastructure of MegaUpload and its management team continued this morning when founder Kim Dotcom appeared in a New Zealand court.

Dotcom, a 37-year-old German citizen with joint New Zealand and Hong Kong residency, appeared alongside three other MegaUpload employees – site co-founder Mathias Ortmann, 40, chief marketing officer Finn Batato, 38, and programmer and networking expert Bram van der Kolk, 29.

The hearing in an Auckland district court heard how local police had been working with US authorities since 2011 culminating in raids yesterday on ten private and business locations. Among them was Kim’s residence, Dotcom Mansion, and what happened there resembles something from a movie.

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New Zealand police sent 76 officers, some armed, to raid the property which reportedly housed 15 individuals including bodyguards, security staff, women and children.

“Police arrived in two marked police helicopters. Despite our staff clearly identifying themselves, Mr Dotcom retreated into the house and activated a number of electronic locking mechanisms,” Detective Inspector Grant Wormald told the court.

“While police neutralized these locks he then further barricaded himself into a safe room within the house which officers had to cut their way into,” Wormald added.

At the hearing, the first step to being extradited to the United States, all four defendants were denied bail and are due to reappear at another hearing next Monday. Police say there are no intentions of trying the defendants under local laws.

“This particular type of action around internet copyright infringement is a first in New Zealand in terms of an overseas person being attempted to be extradited to the United States,” said Intellectual Property Lawyer Rick Shera, as quoted by TVNZ.

Three other defendants – a German, a Slovakian and an Estonian – all remain at large.


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Why are they trying to censor the internet?

It seems to me that "they", is the powers to be. Major corps, government officials, and governments! It is of course for money and they do not want anyone else to make or better yet to cut into their future profits!!! If the mass's allow this censorship to continue soon the internet will change permanently and "Big Brother will be in every home & smart phone in the world" assuming that they are not already. Please help to keep sopa/pipa from becoming law and any similar action to change the internet.

More on megaupload and questions why?

The US government dropped a nuclear bomb on "cyberlocker" site Megaupload today, seizing its domain names, grabbing $50 million in assets, and getting New Zealand police to arrest four of the site's key employees, including enigmatic founder Kim Dotcom. In a 72-page indictment unsealed in a Virginia federal court, prosecutors charged that the site earned more than $175 million since its founding in 2005, most of it based on copyright infringement.As for the site's employees, they were paid lavishly and they spent lavishly. Even the graphic designer, 35-year-old Slovakian resident Julius Bencko, made more than $1 million in 2010 alone.The case is a major one, involving international cooperation between the US, Hong Kong, the Netherlands, the UK, Germany, Canada, and the Philippines. In addition to the arrests, 20 search warrants were executed today in multiple countries. No safe harbor for youGoing after Megaupload, one of the most popular sites in the world and one that uses a surprising amount of corporate bandwidth, might seem a strange choice. (As an example of its scale, Megaupload controlled 525 servers in Virginia alone and had another 630 in the Netherlands—and many more around the world.) For years, the site has claimed to take down unauthorized content when notified by rightsholders. It has registered a DMCA agent with the US government. It has created an “abuse tool” and given rightsholders access. It has negotiated with companies like Universal Music Group about licensing content. And CEO Kim Dotcom sent this curious e-mail to PayPal in late 2011:Our legal team in the US is currently preparing to sue some of our competitors and expose their criminal activity. We like to give you a heads up and advice [sic] you not to work with sites that are known to pay up loaders for pirated content. They are damaging the image and the existence of the file hosting industry (see what's happening with the Protect IP Act). Look at Fileserve.com, Videobb.com, Filesonic.com, Wupload.com, Uploadstation.com. These sites pay everyone (no matter if the files are pirated or not) and have NO repeat infringer policy. And they are using PayPal to pay infringers.But the government asserts that Megaupload merely wanted the veneer of legitimacy, while its employees knew full well that the site's main use was to distribute infringing content. Indeed, the government points to numerous internal e-mails and chat logs from employees showing that they were aware of copyrighted material on the site and even shared it with each other. Because of this, the government says that the site does not qualify for a “safe harbor” of the kind that protected YouTube from Viacom's $1 billion lawsuit.For instance, the “abuse tool” allegedly does not remove the actual file being complained about by a rightsholder. Instead, it only removes a specific Web address linked to that file—but there might be hundreds of such addresses for popular content.In addition, the government contends that everything about the site has been doctored to make it look more legitimate than it is. The “Top 100” download list does not “actually portray the most popular downloads,” say prosecutors, and they claim that Megaupload purposely offers no site-wide search engine as a way of concealing what people are storing and sharing through the site.Megaupload employees apparently knew how the site was being used. When making payments through its “uploader rewards” program, employees sometimes looked through the material in those accounts first. "10+ Full popular DVD rips (split files), a few small porn movies, some software with keygenerators (warez)," said one of these notes. (The DMCA does not provide a "safe harbor" to sites who have actual knowledge of infringing material and do nothing about it.)In a 2008 chat, one employee noted that "we have a funny business... modern days [sic] pirates :)," to which the reply was, "we're not pirates, we're just providing shipping servies [sic] to pirates :)."Employees send each other e-mails saying things like, “can u pls get me some links to the series called ‘Seinfeld’ from MU [Megaupload]," since some employees did have access to a private internal search engine.Employees even allegedly uploaded content themselves, such as a BBC Earth episode uploaded in 2008.Other messages appear to indicate that employees knew how important copyrighted content was to their business. Content owners had a specific number of takedown requests they could make each day; in 2009, for instance, Time Warner was allowed to use the abuse tool to remove 2,500 links per day. When the company requested an increase, one employee suggested that "we can afford to be cooperative at current growth levels"— implying that if growth had not been so robust, takedowns should be limited. Kim Dotcom approved an increase to 5,000 takedowns a day.Employees also had access to analytics. One report showed that a specific linking site had “produce[d] 164,214 visits to Megaupload for a download of the copyrighted CD/DVD burning software package Nero Suite 10. The software package had the suggested retail price of $99.” The government's conclusion: Megaupload knew what was happening and did little to stop it. The need for careYet the indictment seems odd in some ways. When Viacom made many of the same charges against YouTube, it didn't go to the government and try to get Eric Schmidt or Chad Hurley arrested.It's also full of strange non-sequiturs, such as the charge that "on or about November 10, 2011, a member of the Mega Conspiracy made a transfer of $185,000 to further an advertising campaign for Megaupload.com involved a musical recording and a video." So?The money probably paid for a video that infuriated the RIAA by including major artists who support Megaupload. Megaupload later filed claims in US courts, trying to save the video, which it says was entirely legal, from takedown requests. (The RIAA has long said the site operators "thumb their noses at international laws, all while pocketing significant advertising revenues from trafficking in free, unlicensed copyrighted materials.")Given that the site was already using US courts to file actions; given that the government had Megaupload e-mails talking about using US lawyers to file cases against other "pirate" sites; given that the site did at least take down content and built an abuse tool; and given that big-name artists support the site, the severity of the government's reaction is surprising.There's no doubt that the indictment makes Megaupload look bad, though, and we're quite curious to see what comes of the case—especially once the site has a chance to respond.Law professor James Grimmelmann of New York Law School tells Ars, "If proven at trial, there's easily enough in the indictment to prove criminal copyright infringement many times over. But much of what the indictment details are legitimate business strategies many websites use to increase their traffic and revenues: offering premium subscriptions, running ads, rewarding active users."I hope that if this case goes to trial and results in convictions, that the court will be careful in sorting out just what Megaupload did that crossed the line of criminality."The MPAA doesn't have any doubts, though. "By all estimates, Megaupload.com is the largest and most active criminally operated website targeting creative content in the world," it said in a statement. "This criminal case, more than two years in development, shows that law enforcement can take strong action to protect American intellectual property stolen through sites housed in the United States."(source

Thursday, January 19, 2012

How are protests about sopa/pipa working?

Wednesday's SOPA/PIPA protests were declared a success. Here's a look at how protesters define success.New York City demonstration against SOPA/PIPA, outside the Manhattan offices of Senators Charles Schumer and Kirsten Gillibrand, who co-sponsored the Senate PIPA bill.Wednesday's online protests against two online antipiracy bills currently before Congress are being hailed as a success after sites such as BoingBoing, Reddit and Wikipedia temporarily shut down to oppose the Stop Online Piracy (SOPA) and Protect IP (PIPA) Acts. As a result, more than 162 million people saw the protest message on Wikipedia, 18 senators have backed away from the proposed legislation, and 4.5 million people signed a petition against the acts.The New York Times called Wednesday's online activism, that also included messages of protest from Craigslist, Google and Mozilla, "a political coming of age for the tech industry." While the Motion Picture Association of America's Chairman and CEO (and former U.S. Senator) Chris Dodd said on Tuesday the protests were an "abuse of power" that turned users into the tech industry's "corporate pawns" (PDF).Many technology companies, especially Web-based companies, oppose SOPA and PIPA arguing the bills will undermine the free and open web. Critics say the legislation empowers the government and private parties to censor the Web for American Internet users by requiring search engines and Internet Service Providers to block access to websites accused of copyright infringement.Alexis Ohanian, cofounder of Reddit, expressing his dismay at SOPA/PIPA, at a new York City demonstration against the pending legislation.Now that the lights are back on at Wikipedia, BoingBoing is publishing, and Reddit users are once again commenting on cute puppy pictures here's a look at the fallout from Wednesday's protests and where the debate goes from here.-4.5 million people signed Google's anti-SOPA/PIPA petition, according to the Los Angeles Times-25 Senators now oppose PIPA (the Senate version of SOPA), according to OpenCongress-Twitter saw more than 2.4 million SOPA-related tweets between midnight and 4 p.m. Eastern on Wednesday-Two SOPA co-sponsors and several others dropped support for the House bill-More than 162 million people saw Wikipedia's protest page-More than 8 million people used Wikipedia's search tool to look up their elected representatives' contact information-News Corp. Chairman and CEO Rupert Murdoch accused "the blogosphere" of "terrorizing many senators and congressmen who previously committed" to SOPA and PIPA.-Conservative publication The National Review called on Congress to dump SOPANew York City demonstration against SOPA/PIPA.What's Next?While Wednesday's protests may have raised awareness about the antipiracy legislation's potentially negative impact on the Internet, the fight over how to deal with piracy continues. SOPA sponsor and Chair of the House Judiciary Committee Lamar Smith (R-Tex.) recently vowed to continue working to get the antipiracy legislation passed. And advocacy organizations such as the Electronic Frontier Foundation and the Center for Democracy say the will continue opposing both SOPA and PIPA. The next Senate vote for PIPA is scheduled for January 24. View: Original Article

Who took incentives for involvement with sopa/pipa

Lists of members that took incentives and amount:#1 Harry Reid (Neveda Senator, Senate Majority Leader): $3,502,624 Sen. Charles Schumer [D, NY] $2,648,770 Sen. Kirsten Gillibrand [D, NY] $2,080,651 Sen. Barbara Boxer [D, CA] $1,431,843 Sen. Scott Brown [R, MA] $1,364,872 Sen. Robert Portman [R, OH] $1,363,009 Sen. Patrick Toomey [R, PA] $1,291,744 Sen. Michael Bennet [D, CO] $1,019,172 Sen. Mark Kirk [R, IL] $911,296 Sen. Patrick Leahy [D, VT] $905,310 Rep. Eric Cantor [R, VA-7] $668,192 Rep. Howard Berman [D, CA-28] $590,398 Rep. Steny Hoyer [D, MD-5] $557,107 Rep. James Clyburn [D, SC-6] $486,927 Rep. Michael Capuano [D, MA-8] $465,500 Rep. Bruce Braley [D, IA-1] $438,839 Rep. Nancy Pelosi [D, CA-8] $416,100 Rep. Allyson Schwartz [D, PA-13] $409,019 Rep. John Boehner [R, OH-8] $403,800 Rep. Gary Peters [D, MI-9] $395,798 Contributors: Total of 161 organizations (Including MPAA, and RIAA)

Founder of Megaupload arrested?

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Feds shutdown megupload?

Megaupload, one of the internet's largest file-sharing sites, has been shut down by officials in the US.The site's founder have been charged with violating piracy laws.Federal prosecutors have accused it of costing copyright holders more than $500m (£320m) in lost revenue. The firm says it was diligent in responding to complaints about pirated material.Investigators denied a link to recent protests against proposed piracy laws, according to the Wall Street Journal.The US Justice Department said that Kim Dotcom, formerly known as Kim Schmitz, and three others were arrested in Auckland, New Zealand at the request of US officials. It added that three other defendants were still at large."This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime," said a statement posted on its website.Third-party sitesThe charges included copyright infringement, conspiracies to commit racketeering, copyright infringement and money laundering.A federal court in Virginia ordered that 18 domain names associated with the Hong Kong-based firm be seized.The Justice Department said that more than 20 search warrants had been executed in nine countries, and that approximately $50m in assets had been seized.It claimed that the accused pursued a business model designed to promote the uploading of copyrighted works."The conspirators allegedly paid users whom they specifically knew uploaded infringing content and publicised their links to users throughout the world," a statement said."By actively supporting the use of third-party linking sites to publicise infringing content, the conspirators did not need to publicise such content on the Megaupload site. Instead, the indictment alleges that the conspirators manipulated the perception of content available on their servers by not providing a public search function on the Megaupload site and by not including popular infringing content on the publicly available lists of top content downloaded by its users."Before it was shut down the site posted a statement saying the allegations against it were "grotesquely overblown"."The fact is that the vast majority of Mega's internet traffic is legitimate, and we are here to stay," it added."If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch."BlackoutsOn Wednesday, thousands of websites took part in a "blackout" to protest against the Stop Online Piracy Act (Sopa) and the Protect Intellectual Property Act (Pipa).Industry watchers suggest this latest move may feed into the wider debate."Neither of the bills are close to being passed - they need further revision - but it appears that officials are able to use existing tools to go after a business alleged to be inducing piracy," said Gartner's media distribution expert Mike McGuire."It begs the question that if you can find and arrest people who are suspected to be involved in piracy using existing laws, then why introduce further regulations which are US-only and potentially damaging." Source