A not-insignificant consequence of the federal government’s move in January to shut down the popular file-sharing site MegaUpload is that customers are blocked from being able to access their files.
First, some background. In January, the government charged that MegaUpload and its founder Kim Dotcom operated an organization dedicated to copyright infringement, or in other words operated for the purpose of a criminal enterprise. The site provided a number of online services related to file storage and viewing, which (among other things) allowed users to download copyrighted material. The government also claimed in its indictment that the site was also used for other criminal purposes including money laundering.
Not surprisingly, the file-sharing activities caught the unpleased eye of prominent content ownership groups such as the Motion Picture Association of America and Recording Industry Association of America, who found that not only was member property being pillaged but that MegaUpload profited handsomely in the process from user fees and advertising.
Since the shutdown, MegaUpload customers who use the site’s file hosting services have not been able to access files, and according to David Kravets of Wired, the government will not help. Kravets wrote in early June that “the government … seized the files of 66.6 million customers as part of its prosecution, and is refusing to give any of the data back to its owners.”
This raises a threshold question of who owns user files. MegaUpload’s Terms of Service do not help clarify the question, with their absence of clear ownership statement as to customer uploads. MegaUpload’s Terms (along with the rest of the site) are no longer publicly available, but a copy is published by at least one user on Scribd, stating in relevant part,
You acknowledge that all materials (except those uploaded by users) provided on this Web site… and the underlying intellectual property rights are owned by Megaupload and/or its Third Party Providers.
MegaUpload does not claim rights of ownership to user files. Interestingly, however, its Terms do alert users to the risks involved in data loss (from whatever means, unfortunately), including recommending redundancy in data archiving:
Customer has sole responsibility and liability for the data its stores on Megaupload’s servers. Customer controls its data through its generated link. Megaupload encourages Customer to archive its data regularly and frequently; Customer bears full responsibility for archiving its data and sole liability for any lost or irrecoverable data. Customer agrees to maintain its data in compliance with its legal obligations.
In a court filing, the government argued that it has no obligation to return to any user or even provide any user access to files, here relying on a cost argument in response to one particular MegaUpload customer’s demand for access:
[A]ccess is not the issue – if it was, [the user] could simply hire a forensic expert to retrieve what he claims is his property and reimburse [the server hosting company] for its associated costs. [Rather,] the issue is that the process of identifying, copying, and returning [the user’s] data will be inordinately expensive, and [the user] wants the government, or [the server hosting company] or anyone other than himself, to bear the cost.
More substantively, perhaps, the government argued that assisting an Ohio man in accessing his company’s high school sports footage “would create a new and practically unlimited cause of action on behalf of any third party who can claim that the government’s execution of a search warrant adversely impacted a commercial relationship between the target of the search and the third party.” Put another way, the government claims it would face innumerable legal claims for damages from aggrieved innocent third parties every time it moves to seize assets of illegal businesses. A result, argues the government, which could not have been intended.
Concerns over the government’s actions in this matter linger, prompting a retired judge to opine that perhaps the government is falling behind the (digital) times. Wired’s “Threat Level” column reports that retired federal judge Abraham Sofaer joined the Electronic Frontier Foundation (EFF) to file a brief with the MegaUpload court urging establishment of a mechanism or clearinghouse for users to reclaim their content, disputing the government’s claims of logistical impracticality. EFF and Judge Sofaer argue that the technical and cost challenges should be no greater than when files were accessible before the shutdown.
The government so far has resisted the push, presumably worried about difficulties in distinguishing legal from contraband content. But really, that’s just it. Those are the very challenges created by applying traditional law enforcement practices to digital age assets whose access and ownership are often bafflingly complex. Critics of the government’s actions have been many and vocal, though not necessarily accurate: Mike Masnick of Techdirt writes “Would the government take the same position over a seized bank? Of course they would help customers get their deposits back. But you can clearly see that the government is acting in a manner that is indiscriminate.” That seems a stretch – see for example the still-continuing challenges faced by investors, the bankruptcy court and government trustees with managing and distributing the assets of fund manager Bernard Madoff.
For his part, Judge Sofaer calls the government’s actions “really quite outrageous”, telling Wired, “I was thinking the government hadn’t learned to be discreet in its conduct in the digital world. This is a perfect example on how they are failing to apply traditional standards in the new context.”
Thomas J. Barrelle, a Research and Social Media Intern with Mirsky & Company, contributed to this post.
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