Megaupload Server Purge Delayed

A scheduled purging of Megaupload’s data was tentatively shelved Tuesday to give its millions of account holders an opportunity to attempt to retrieve their content from the file-sharing service, whose top officials were indicted on criminal copyright charges.

The authorities shuttered the Hong Kong-based site Jan. 19, and indicted seven of its top officials in what the Justice Department said was “among the largest criminal copyright cases ever brought by the United States.”

As part of its prosecution, the government had copied an undisclosed amount of data from Megaupload’s servers in the United States.

The entire contents of Megaupload were set to be purged later this week by Carpathia and Cogent, two of Megaupload’s U.S.-based server hosts. The United States has frozen Megaupload’s assets, and it has been unable to pay its hosting bill, said Ira Rothken, Megaupload’s attorney.

Rothken said in a telephone interview he is negotiating with the government to unfreeze Megaupload assets to keep Megaupload’s servers active so the company can “deliver consumer data back to consumers.” He said the two companies have agreed not to purge data for at least two weeks.

The Electronic Frontier Foundation said Tuesday it would assist those attempting to retrieve their data, but could not promise results to the estimated 150 million account holders.

Julie Samuels, an EFF attorney, said in a telephone interview it was unclear what data the authorities copied from Megaupload’s servers, and said it was too early to say what access the authorities have to data uploaded by individual account holders.

Jay Prabhu, chief of the Justice Department’s Cybercrime Unit, said in a court filing that search warrants authorized the government to seize “selected data.”

Megaupload’s terms of service inform account holders that they “have no proprietary interest in any of the files on Megaupload’s servers” and that “Megaupload can terminate site operations without prior notice.”

The government said the site facilitated copyright infringement of movies “often before their theatrical release, music, television programs, electronic books, and business and entertainment software on a massive scale.” The government said Megaupload”s “estimated harm” to copyright holders was “well in excess of $500 million.”

A five-count indictment from the Eastern District of Virginia was unsealed two weeks ago, when the Justice Department said it seized 18 domains in all connected to Megaupload. The agency said it executed more than 20 search warrants in the United States and eight countries, seizing $50 million in assets.

Megaupload, which often charges its 150 million registered members for its file-sharing service, was on the recording and movie industries’ most-hated lists, often being accusing of facilitating wanton infringement of their members’ copyrights. The indictment claims it induced users to upload copyrighted works for others to download, and that it often failed to comply with removal notices from rights holders under the Digital Millennium Copyright Act.

According to the indictment, the defendants generated revenue through subscriptions and online advertising. Subscriptions cost as “little as a few dollars a day” or $260 per lifetime. The indictment claimed the site took in $150 million in subscription fees overall and $25 million in advertising over a five-year period.

Among the indicted, they include:

*Kim Dotcom, 37, of New Zealand and Hong Kong, Megaupload founder.
*Finn Batato, 38, of Germany, chief marketing officer.
*Julius Bencko, 35, of Slovakia, graphic designer.
*Sven Echternach, 39, of Germany, head of business development.
*Mathias Ortmann, 40, of Germany and Hong Kong, chief technical officer co-founder and director.
*Andrus Nomm, 32, of Turkey and Estonia, software programmer.
*Bram van der Kolk, aka Bramos, 29, of the Netherlands and New Zealand, programmer.

Dotcom, van der Kolk, Batato and Ortmann all were denied bail last week in Auckland, New Zealand, where they were arrested. The government is seeking to extradite them to the United States. The others remain at large.