Internet Law

Those with Legitimate Content on Megaupload Site Raided by Feds Could Lose It in 'Data Genocide'

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There’s bad news for those who may have stored personal and professional materials via the website recently raided and shut down by the feds as they pursued a criminal online piracy case.

Even if material was stored there in full compliance with copyright law, users of the site may not be able to get it back, CNN reports.

Now that federal prosecutors are done reviewing Megaupload’s files, “It is our understanding that the hosting companies may begin deleting the contents of the servers beginning as early as February 2, 2012,” said U.S. Attorney Neil H. MacBride in a letter filed Friday in the Eastern District of Virginia case.

The problem is, Megaupload’s funds were frozen as part of the federal raid on the site. Hence, the company isn’t in a position to continue paying the hosting companies to prevent “data genocide,” TechCrunch explains. However, lawyers for the company—who also hope to gain access to Megaload’s money to cover legal fees—are seeking permission to free up funds for the hosting companies, too.

“Megaupload’s assets were frozen by the United States. Mega needs funds unfrozen to pay for bandwidth, hosting, and systems administration in order to allow consumers to get access to their data stored in the Mega cloud and to back up the same for safekeeping.” attorney Ira Rothken, who represents Megaupload, told TorrentFreak.

He adds, “We of course would like to think the United States and Megaupload would both be united in trying to avoid such a consumer protection calamity whereby innocent consumers could permanently lose access to everything from word processing files to family photos and many other things that could never practically be considered infringing.”

Meanwhile, at least one of the hosting companies says it has no control of Megaupload’s servers and is telling concerned users who are trying to regain control of their materials to contact Megaupload, CNN reports.

Lawyers representing the file-sharing enterprise and its operators didn’t immediately respond to CNN’s request for comment.

However, it seems clear that there is, at the very least, cause for concern among those who relied on the online storage locker for convenient access to their personal or professional materials no matter where in the world the user might be, according to Bloomberg.

As the operators of other online ventures worry about whether it is safe to do business with customers in the U.S., “there’s a huge problem for customers of the online lockers,” partner Andrew P. Bridges of Fenwick & West tells the news agency. His law firm worked for Megaupload on an unrelated case.

“I think the copyright industries are hoping to put cyberlockers out of business through intimidation,” Bridges says, referring to a perception that the Megaupload case serves the interests of the music and movie industries by preventing illegal downloads of copyrighted material and thus helping to preserve entertainment companies’ profits.

Another attorney echoes that view.

“The demise of Megaupload and resultant confusion as to the stored user files demonstrates the evanescence of digital data due to mislaid trust,” tech lawyer Raymond Van Dyke of Washington, D.C. told E-Commerce Times.

“Clearly, companies … that thumb their noses at copyright interests are poor paradigms for stability.”

Additional coverage: “Feds Shut Down, Say Indicted Site Operators Are Part of Worldwide ‘Mega Conspiracy’”

Reuters: “Megaupload founder faces lengthy extradition battle”

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