MegaFallout: Shutdown of MegaUpload Spooks Other Services

The fallout from last week’s FBI raid and shutdown of MegaUpload isn’t limited to founder Kim Dotcom and his associates. As intriguing as that story will be to follow, some of the more immediate side effects are being felt among other file-hosting services.

Some companies that are perceived, correctly or not, of having a similar model to MegaUpload’s are now scrambling to prevent their own demise now that that the legitimacy of that model has been very publicly – and dramatically – challenged.

Some are responding by turning off their services all together, presumably pending some further legal research. Others are vocally defending their own practices in light of the details contained in the indictment against MegaUpload. If last week’s raid was meant in part to scare the bejeezus out of other file-sharing services, that strategy appears to be working.

Popular sites like FileSonic and FileServe are preventing users from downloading files uploaded by anybody other than themselves., another service used for hosting and sharing files, has stopped accepting users from U.S.-based IP addresses all together. In total,’s Eliot Van Buskirk counted nine different file-hosting services that have made some kind of substantial change to their functionality since the MegaUpload shutdown.

Where’s the Line?

MediaFire and RapidShare, both of which are often used to host and download copyrighted content, have gone on the offensive, giving statements to the press that attempt to draw the line between their models and what MegaUpload was doing.

“We don’t have a business built on copyright infringement,” MediaFire CEO Derek Labian told VentureBeat, adding that his company is more akin to services like DropBox and than it is to MegaUpload. There’s little reason to doubt him, as much of what has surfaced about MegaUpload’s operations has turned out to be rather shady. MediaFire, by contrast, claims to have solid relationships with many of the relevant federal agencies.

Similarly, RapidShare has been quick to distance itself from MegaUpload and paint a stark contrast between the two services. The company, which recently released a native app for iOS, put out a statement explaining that they “differ from services such as MegaUpload in many crucial points,” most notably that they’ve always been transparent about their company’s location and the identities of the people running it.

Each of these services is different in terms of its functionality and legal compliance, and it would appear that those with the least confidence in the integrity of their own model are taking measures to scale things back a bit.

If the charges are to be believed, what MegaUpload was up to was particularly egregious. Still, the whole affair raises questions about where the line is. People can use any number of mechanisms for sharing files with each other, including copyrighted material. If the FBI can raid MegaUpload and shut it down, what’s stopping the authorities from going after other services?

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