Sounding Off: Silvina Moschini The closing of Megaupload: SOPA all over again?

In this article, Silvina Moschini (photo), CEO of Intuic, talks about recent SOPA-related developments and important players in the digital media industry who have opposed the bill.

While the so-called SOPA bill (Stop Only Piracy Act) is being debated in the United States, British newspaper The Guardian has revealed that the Vatican itself has turned to Wikipedia to write the biographies of its 22 new cardinals.

The connection between the two issues is more evident than it might seem at first glance. While U.S. bill ?which has already been opposed by Google, Facebook and Wikipedia itself? proposes very strict regulation of Internet content, the episode regarding the Holy See once again illustrates the importance of collaborative digital platforms. Wikipedia, the largest (but not the only) exponent of free information exchange, gets almost 3,000 hits per second worldwide.

A few days ago, amid the controversial debate over the online piracy law, the FBI closed Megaupload, the web’s most popular file-sharing site. A mere coincidence?

After the famous blackout against SOPA, in which large websites blacked out their sites for a day with signs against the bill (after which it began to lose support in Congress), the Federal Bureau of Investigation (FBI) announced the closure of the most popular download site.

Hand in hand with this measure, five company executives were arrested, accused by authorities of being part of a criminal global piracy organization. The arrests took place in New Zealand and among the defendants are company founder Kim Dotcom (also known as Kim Smith); the head of marketing and sales, the site’s graphic designer, the head of business development, and the company’s programming chief. New Zealand authorities must decide whether or not to extradite the company’s founder to the U.S. to stand trial.

SOPA connection?

Authorities say this decision has nothing to do with the SOPA bill, pointing out that the investigation has been in course for more than two years and police were asked to intervene two weeks ago. Among various reports presented to validate the charges is an email sent to Kim Dotcom from Google Adsense, stating that its site content included links to copyrighted works and because of this, they could not continue working together. This charge led the company to create its own advertising services provider. On the other hand, conversations between company executives have come to light in which they say they are not "modern-day pirates," but rather their 'transportation' providers. The company is accused of generating more than $175 million in profits from these illegal activities, causing copyright owners more than $500 million in losses.

While the evidence appears to validate the charges, Megaupload users cannot search for links to copyrighted content, which in this case means links that are shared by others and thus violate copyright rules.  To avoid this, the company created the so-called "abuse tool," which identifies links that are breaking the law and removes or blocks them from the site.

The reaction

Hacker group Anonymous has claimed credit for the recent crashing of the U.S. Department of Justice and Universal Music websites, among others, dubbing it "Operation Revenge."  However, the French government has taken the side of U.S. authorities this time, congratulating it for its decision to close the file-sharing site.

Megaupload figures

The company, founded in 2005 by Kim Dotcom (who owns 68% of the company), has over one billion users, or 4% of the Internet.  According to the allegations made by U.S. authorities, the majority of the company’s revenues for its Premium accounts were received via PayPal. In just 5 years, Megaupload has earned more than $110 in subscriber fees.

On the other hand, over $40 million in bank transactions made between company accounts have been identified, ranging from lodging to yacht charters. Among the documents submitted by the FBI, it was discovered that online payment company Money Bookers (a PayPal competitor) had transferred more than $5 million in payments to Megaupload. The site also received $840,000 in advertising from Adbrite.  The income generated by its affiliated sites totals close to $25 million.

Silvina Moschini is CEO and Founder of Intuic | The Social Media Agency. An expert in Social Media Marketing and Online Visibility, Moschini was born in Argentina and has developed an important corporate communications career in large global companies such as Visa International, Compaq Computer Corporation and Patagon.com.


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Editorial Staff (@portada_online)

Portada is the leading source of news and analysis on the Latin Marketing and Media space. Credibility is our biggest asset: The Portada team is very passionate about producing high-quality independent content that helps drive forward the Latin Marketing and Media space.
El equipo editorial de Portada se apasiona por elaborar contenidos de alta calidad. La credibilidad es nuestro mayor activo. La misión de Portada es ayudar a profesionales de negocios y medios a comprender y alcanzar a consumidores latinoamericanos, del mercado hispano de EE UU y España.

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