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Megaupload effect: FileSonic drops file sharing, Uploaded.to drops the US

upload.to

FileSonic.com has cut all file-sharing features from its services, and Uploaded.to has severed access for users in the United States. The amputations follow Thursday’s international takedown of Megaupload.com and its top brass, an operation orchestrated by the US government.

“All sharing functionality on FileSonic is now disabled,” says a notice on FileSharing’s front page. “Our services can only be used to upload and retrieve files that you have uploaded personally.”

Uploaded.to users located in the United States who try to access the site are blocked entirely, held back by a landing screen: “Not available,” it reads. “Our service is currently unavailable in your country. Sorry about that.”

Both FileSonic and Uploaded.to are registered outside the US. According to Who.is, FileSonic is registered in the Netherlands; Uploaded.to lists a building in Hong Kong as its primary address.

Is Megaupload’s fate to blame?

Probably. Neither FileSonic nor Uploaded.to have so far released a public statement on their decisions to change their service offerings. So it’s as yet impossible to say with certainty. Of course, it’s also impossible not to assume that their departure from the file-sharing game in the US is tightly related to last week’s legal obliteration of Megaupload, whose flamboyant founder, Kim DotCom, 38, was torn from the armored bowels of his Coatesville, New Zealand, mansion by police.

According to the indictment of Megaupload, the site enjoyed more than 50 million visits daily, and accounted for four percent of all Internet traffic. This allegedly allowed the file-sharing site to bring in $175 million in profits annual from premium membership fees, and advertising. The copyright industry has claimed a loss in revenue above $500 million as a result of Megaupload.

One of Megaupload’s attorneys, Ira Rothkin, argued in an interview with the Washington Post that the company was denied due process, and that the case against the site is “very similar” to Viacom’s 2010 copyright lawsuit against YouTube, which YouTube won.

“The allegations in the indictment appear very similar to the types against popular sites in civil cases like YouTube. YouTube ultimately prevailed in its case,” said Rothkin. “Megaupload will vigorously defend itself in this case, and we believe we will likely succeed.”

How do SOPA and PIPA play into all this?

Legally, they don’t. Both the “Stop Online Piracy Act” (SOPA) and the “PROTECT IP Act” (PIPA) are just bills — not laws — which have currently been put on hold, after a mass online blackout against these pieces of legislation riled a surge in public outcry. But let’s assume for a moment that SOPA/PIPA still become law — which technically remains a possibility; what then?

SOPA and PIPA specifically target “foreign rogue websites.” Were either (or, more likely, a combination of the two) to become law, websites that meet this description could be forcefully (or voluntarily) blocked by US-based Internet service providers, de-indexed from search engines, and have their sources of revenue strangled.

Because Megaupload had servers house on US soil, however, it is considered simply a “rogue website” — even though its base of operations is officially in Hong Kong, and its founder is not a US citizen. On this distinction, the Federal Bureau of Investigation operated under the conclusion that it had legal authority to go after the company and its executives.  

To the best of our knowledge, neither FileSonic nor Uploaded.to have any servers, or other official business establishments, inside US territory. Assuming we’re right, they aren’t subject to current US law, but would be blocked to Americans, were SOPA/PIPA to pass.

If they have any businesses in the US, both could be subject to the same brutal treatment as Megaupload. For now, however, it appears that they just don’t want to take any chances.

What next?

We doubt FileSonic and Uploaded.to will be the last file-sharing sites to change their service offerings, or retreat from the US market. But even if they are, it’s clear that the FBI’s hard-handed tactics can help copyright industries win battles without Congress’ help.

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