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FBI busts global Internet hosting service

One day after SOPA blackout day, the U.S. Justice Department has unveiled its latest high-profile piracy prosecution with charges against the operators of Hong Kong-based digital locker service MegaUpload. In one of the largest copyright cases in U.S. history, the Feds accuse MegaUpload and its associated sites MegaVideo, MegaLive, MegaPix, and MegaPorn, of costing U.S. ...

One day after SOPA blackout day, the U.S. Justice Department has unveiled its latest high-profile piracy prosecution with charges against the operators of Hong Kong-based digital locker service MegaUpload. In one of the largest copyright cases in U.S. history, the Feds accuse MegaUpload and its associated sites MegaVideo, MegaLive, MegaPix, and MegaPorn, of costing U.S. copyright holders more than $500 million in revenue. The site settled a copyright infringement lawsuit in U.S. courts from an American pornography studio last November.

MegaUpload’s operations — aside from its high-profile celebrity endorsements — are somewhat mysterious. It’s servers were thought to be located in obscure data havens, but according to U.S. Senator and PIPA sponsor Patrick Leahy in Virginia, giving the FBI jurisdiction. The company was registered in Hong Kong and listed hip-hop producer Swizz Beatz as its CEO, but actually appears to have been run from New Zealand by its founder, the colorful Kim Schmitz, aka Kim Dotcom, a German national, former hacker, and street racer known in online security circles as "Dr. Evil."(Rolling Stone has more on the Swizz Beatz angle.)

Dotcom and three others were arrested in Auckland, New Zealand today and could face up to 20 years in prison under U.S. law, though one imagines a lengthy Assange-esque extradition fight in the New Zealand courts may be forthcoming. 

It’s hard not to read anything into the timing here. The White House came out against SOPA and PIPA, but were careful to note in their announcement that "we believe that online piracy by foreign websites is a serious problem that requires a serious legislative response." Could this have been a way of demonstrating to the U.S. media companies who supported SOPA just how serious they are about the problem?

Update: That was quick. CNN reports that Anonymous has attacked the websites of the Department of Justice, Recording Industry Association of America,  and Motion Picture Association of America in retaliation.

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