The impact of the Megaupload case on storing data in the cloud

In the case of Megaupload, much more is at stake than the freedom of its founder Kim Dotcom and his colleagues.

Privacy and property rights of more than 60 million of its users are also at risk, as well as privacy and property rights of anyone who stores data in the cloud - so they say in the Electronic Frontier Foundation, which represents one of the Megaupload users in a lawsuit against government. This trial can create a very important precedent for all users of cloud services.
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The problem is that at the moment there is no clear way for users to get their property, which federal bailiffs seized when closing the file sharing service in January due to suspicions of copyright infringement. According to EFF representative Julia Samuels, even if the system is put back into operation, it is highly likely that the stored information will first have to be checked by the authorities or by a third party in order to identify a broken copyright, since the transfer of such information is undesirable. Thus, with the increase in users, there are serious questions about property rights and privacy. “There must be a mechanism for returning data to users,” says Samuels, “These are important property rights. If we do not take this into account, we will harm independent parties. These questions are not worked out. Nowadays, more and more users are using cloud technologies. ”

In the Megaupload case, the authorities initially indicated to Carpathia, the hoster of Megaupload, that it could delete 25 petabytes of the seized data after the service was closed, without taking into account the interests of users.

However, right after EFF submitted documents on behalf of Ohio resident Kyle Goodwin, whose property was seized, the judge acted cautiously, banning the deletion of files, and asked the authorities and the advisor Kim Dotcom and the EFF for proposals and ways (if any There will be a return of property to Megaupload users. Goodwin wants to return records of sporting events in colleges owned by his OhioSportsNet company. According to his statement, the only copies of the records were kept on the site, since the hard disk on which the second copies were corrupted.

Samuels believes that this case will be a precedent that other Megaupload users can rely on when they want to retrieve their files, and will also affect future legal proceedings.

The previous similar withdrawal was made last year, when the feds closed down and withdrew the domains and bank accounts of overseas online poker sites. When these domains were withdrawn, tens of thousands of gamblers lost access to their money until the New York Federal Court reviewed the appeal of players to return their money. But, as the difficulties with the Megaupload case show, there is a big difference between the return of money and digital files. At the moment, according to the proposals of the federal police officers, for users of Megauplod who have placed legal files, it becomes almost impossible to get them back.

In the Goodwin case, the prosecution alleges that “it may be necessary to verify a multitude of evidence, including expert opinion,” to confirm that he is actually the owner of the video files and does not violate other people's copyrights. The materials also recorded a statement by the authorities that the MD5 hashes of its files "coincided with the hash values ​​for pirated versions of popular music." Thus, it is possible to delay the return of files until they are checked by the authorities or a third party appointed by the court. The MPAA stated in court that it didn’t care how the situation would be resolved if the decision included “measures preventing the receipt of counterfeit materials”.

“I think these very difficult questions will have to get an answer,” says Samueels, “After all, there is reason for doubt.” The hearings on the data return case are not over yet.

Megaupload allowed users to upload large files and share them with other people, but the feds and Hollywood claim that the service was used almost exclusively to distribute files without the permission of the copyright owner, despite the fact that Dotcom denied it.

The prosecution is directed against seven individuals involved in the Megaupload file storage facility of Hong Kong, including the founder of Dotcom. In January, they were charged with various charges, including copyright infringement and illegal money laundering. Five members of the “gangster organization” called the authorities were arrested in New Zealand. The US authorities claim that the site, which earned hundreds of millions on advertising and user contributions, contributed to the violation of copyright on films that were posted before the premiere, in addition to music, television programs, e-books, and business entertainment software. According to them, the “estimated damage” inflicted to the copyright holders “far exceeds $ 500 million.”