The Breakdown | Explaining Southern California's economy

Megaupload shutdown: Who needs SOPA?

Screenshot from the MegaUpload music video
Screenshot from the MegaUpload music video

USA Today reports in the federal government's shutdown of file-sharing site Megaupload yesterday:

The five-count indictment, which alleges copyright infringement as well as conspiracy to commit money laundering and racketeering, described a site designed specifically to reward users who uploaded pirated content for sharing, and turned a blind eye to requests from copyright holders to remove copyright-protected files.

It was unsealed a day after technology companies staged an online blackout to protest two related bills in Congress that would crack down on sites that use copyrighted materials and sell counterfeit goods. Congressional leaders agreed Friday to indefinitely delay action on those bills — Stop Online Priacy Act in the House and Protect IP Act in the Senate.

Critics contend SOPA and PIPA don't so much protect the rights of filmmakers, musicians, writers and artists as they do preserve an antiquated film and music distribution system.

The consensus among SOPA and PIPA's opponents is that a week of focused protest, culminating in Wednesday's 24-hour blackout of sites like Wikipedia, has forced both bills to the back burner for Congress. And in its way, the Megaupload indictment proves that SOPA and PIPA probably aren't necessary. Megaupload's founder, Kim "Dotcom" (not his original name), was living in New Zealand, and the service was based in New Zealand, according to USA Today. Some servers in Virginia were evidently enough for the Feds to claim jurisdictional authority.

The service had big-name U.S. celebrity endorsers, as KPCC Mike Roe reports, but they weren't really involved in the business.

This is exactly the kind of offshore piracy that current laws about copyright can address — as we've just seen. And no one who objects to SOPA and PIPA really has any issues with busting offshore copyright offenders. It's the chilling effect on innovation at home they're more worried about.

Their opposition, on the other hand, is fighting against the forces of business-model disruption. Big Content — Hollywood, mostly — wants SOPA because it can see a death by a thousand cuts coming if sharing fragments of various kinds of content across a wide variety of networks becomes even more widespread than it already is.

Timing is everything: the Megaupload bust proves that SOPA and PIPA are pointless — just in time for tech opposition to the bills to pulverize the Big Content campaign for the legislation.

Follow Matthew DeBord and the DeBord Report on Twitter.