Copyright Infringement Case Prompts File-Sharing Companies to Change Policies

Even though legislative efforts are on hold for now, online piracy continues to dominate the headlines. As has been widely reported, founder Kim Dotcom was recently arrested in Australia as the request of the U.S. government. The FBI and Department of Justice allege Dotcom (born Kim Schmitz) was the mastermind behind one of the largest cases of copyright infringement to date.

Prior to the arrests, U.S. authorities shut down, a popular file locker service that allowed users to upload files and share them with other users. They say the site was used to facilitate millions of illegal downloads of films, music, and other copyrighted content. The copyright infringement cost copyright holders at least $500 million in lost revenue, according to the government.

In total, seven people have been indicted by grand jury, each charged with five counts of copyright infringement and conspiracy. The possible penalty is 20 years in prison.

What Does the Case Mean for Other File-Sharing Sites?

Websites that offer file-sharing do take certain risks. To avoid allegations of copyright infringement, they must have procedures in place to address potential cases of online piracy. This includes promptly responding to takedown requests issued under the Digital Millennium Copyright Act (DMCA).

In the wake of the Megaupload charges, several other companies that offer file-sharing have taken additional legal precautions. Rival companies FileSonic and have significantly altered their services to avoid the risk of facing similar allegations of copyright infringement.

According to Ars Technica, FileSonic has halted all of its file-sharing activities. It now tells users “our services can only be used to upload and retrieve files that you have uploaded personally.” Meanwhile, has blocked its site to U.S. users, although it is still available to users elsewhere in the world.



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