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Record Labels Sue Megaupload and Founder Kim Dotcom

Following movie industry, RIAA hits file-sharing service for "massive copyright infringement"

Two years after Megaupload shut down with the arrest of its founder Kim Dotcom, the former file-sharing service and its boss keep getting hit with legal documents. The Recording Industry Association of America has sued Dotcom and three other plaintiffs on behalf of the major music labels.

In a statement, the music industry organization said the lawsuit targets “willfully engaged in, actively encouraged, and handsomely profited from massive copyright infringement of music on the Megaupload service” before their January 2012 indictment by federal prosecutors. 

The RIAA’s lawsuit follows a similar lawsuit earlier this month by the movie industry’s equivalent group, the Motion Picture Association of America. Using the numbers in the Justice Department’s indictment, both suits claim Megaupload racked up $175 million in ill-gotten gains while costing copyright owners more than $500 million. 

“Megaupload Limited played an active role in ensuring that it had the most popular content on its servers, that the URL links to those infringing content files were widely disseminated on the Internet, and that the links were advertised and promoted by pirate linking sites, so that the maximum number of Megaupload users would access the infringing content,” the RIAA contends in the lawsuit. “It further exercised active control over the process of providing that content by regulating the volume and speed of transmissions to users who had not yet purchased ‘premium’ subscriptions.” 

The music industry group — representing Warner Music Group, Universal Music Group, Sony Music Entertainment, and Capitol Records — also named as plaintiffs MegaUpload co-founder and chief technical oficer Matthias Ortmann, leading shareholder Vestor Limited, and head programmer Bram van der Kolk. Further, the RIAA’s statement cites research showing that the bulk of Megaupload users had not shifted to another file-sharing service within a year after Dotcom’s company shut its doors.

Dotcom, who is fighting a U.S. effort to extradite him from New Zealand to face online piracy charges, says he is innocent and not responsible for illegal use of his website. His American lawyer, Ira Rothken, slammed the lawsuits yesterday (April 10). “The RIAA, MPAA, and DOJ are like three blind mice following each other in the pursuit of meritless copyright claims,” Rothken said, according to Reuters, referring to the industry groups and the Justice Department. “These cases are an assault on cloud storage technology, as cloud storage is a neutral technology that can be used for both good and bad purposes.”

Earlier this year, Dotcom launched a political party in New Zealand. Last fall he stepped down as director of his nascent MEGA cloud hosting service. He recently unveiled a new music service called Baboom.