It's not being chicken. It's facing the fact that what they are doing is dodgy at best.
Laws were never made to allow the sharing of copyrighted material. They cover themselves with the whole "we are not responsible for what the users upload", which is a nice idea when we are talking about a forum where people are allowed to upload small files.
In the case of these sites they are knowingly hosting shitloads of copyrighted materials, while doing virtually nothing to reduce those amounts.
The question here is whether companies can just completely cover themselves by saying that they are not responsible for the content. We all know those sites are hosting massive amounts of copyrighted material, they know it and nothing is done about it. Were laws (especially DMCA) made for that, or is it being abused?
As much as I want these sites to stay, if I look at the law and it's purpose, then these sites need to be taken down.
There is no law that says that hosts have to police content. The reason most don't actively police non-illegal content (we're talking felonious content like child porn, etc) is because they don't have to. DMCA provides a means by which a copyright holder can require a host to remove copyrighted material, and provides safe harbor to hosts allowing them to operate without actively policing content for copyright. It's very, very difficult to verify copyright (in the removal of the MegaUpload song, the proposed copyright "owners" admit to not actually knowing if they had copyright over anything in the video), so being required to actively police it would bring the entire internet to a grinding halt. The DMCA has been very successful in what it was designed to do. The problem is that these companies don't just want to be limited by the DMCA. They've already abused the hell out of it by blatantly lying about copyrights and filing DMCA on obvious fair use cases (and been sued countless times as a result). So they're lobbying for laws that will let them use federal resources to attack people and as a result gain control over the internet. They want to be able to throw "pirates" into jail and be able to shut down any website they deem "unfit" at any time without due process. They also want unilateral power to extradite those who operate websites that host any copyrighted material whatsoever in other countries (ACTA and other copyright/patent treaties) as those people aren't bound by the DMCA or in many cases by any DMCA-like law.
These companies need to be shut down, period. There is no justification in their actions.
People keep claiming that MU paid people to upload copyrighted content. This is patently false. They have an advertising system that pays users to upload files that bring in a lot of traffic. They have very little obligation to police the contents of those files (and probably report those uploading actually illegal content to authorities). To say that they're paying people to upload copyrighted content is a massive stretch. To claim that they've intentionally sold copyrighted works is absurd, period. There's a difference between knowing that people upload copyrighted content on your site and being required by law to remove it. That difference is the DMCA in the US. Do you think Google employees actually believe that there is no copyrighted material posted on YouTube? LOL. No, they absolutely know about it. Do you see YT shut down because they pay people for bringing in tons of views? No. Same exact thing, except MegaUpload is about 1/1000th the size of Google. *AA has always gone after the little guy and individual consumers, because they can't do anything but bully those who can't defend themselves. They are parasites in the modern age and should be dismantled and everyone involved in their quasi-illegal extremely immoral censorship / extortion ring / racketeering / lobbyism should be thrown in jail for life.
I recently came up with a brilliant idea for a web-based company. Instead of a traditional storage (basically a remote backup) or download website, it would be a true copyright-based backup at the core. The idea is to permit storage of copyrighted data on my server to which I have no copyright or to allow the transmission of copyright ownership from 1 person to another person. It works via a very clever use of public-key cryptography as a DRM (and as a result, is protected via the DMCA against bypassing to obtain an illegal copy). You see, with this technology, a company like Netflix could offer their entire DVD collection to streaming users by lowering the copyright-transaction period from days (snail mail) to milliseconds (instant download). The idea is simple: I own 5 copies of a DVD. Let's say the movie is Click (Adam Sandler wut wut?). Now I want to lend these 5 copies to other people. I could have them queue up and send it around in a first-come-first-serve with no late fees (like Netflix), except that this can result in huge delays if someone isn't timely sending their DVD back or unless I buy a number of copies proportional to my userbase. So instead, I devise a brilliant solution. I write a codec that adds public-key based cryptography on top of an existing set of video/audio codecs that works well on linux, windows, and OSX based platforms. What happens is that the person checking out the file has their computer generate a public/private key pair (say 4096 bit). It then sends me the public key and I take one of the 5 copies of the packaged video/audio file I have on my server and I encrypt the entire file using that public key (without storing intermediate copies). Now that file is irrecoverable to me, it is no longer a copyrighted work since to me it is nothing but a bunch of bits on disk. I then stream that content to the user, and the codec wrapper then decrypts the contents via the private key it owns. When the user is done streaming, the private key is transferred back to the server and erased from the user's computer (as well as any cached buffers holding decrypted or encrypted movie data). The user now has no copies of the movie and I now have the key to decrypt the movie on my server, turning one blob of useless data back into a copy of the movie.
This is the fundamental idea. There are issues, yes, which fall into gray areas legally. But this type of technology would never be permitted via the *AA. They consider transfer of ownership of a license via physical medium and over the internet as two different things (one is not a transfer, merely a copying, by definition they say). You can pull in case law by noting that it's legal for users to create back-up copies of software & movies they buy. It's legal for them to store those DVDs anywhere in the world. It's legal, too, for them to copy those DVDs as backup-backups. It's simply not legal for them to retain those copies after selling their license to another user (they should give them all to that user). So why is the system I described then illegal? A revolutionary step towards maintaining license-boundaries in movie rentals and would make web-based streaming libraries expand by many hundreds of times overnight, but this would result in massive lawsuits and being shut down by the FBI for "criminal copyright infringement." Why? Who's copyright is being infringed. It's the same as sending out DVDs.
This is a technological advancement. Using technology to improve our lives. This is ILLEGAL under the rule of the *AA. This is why these companies do nothing to benefit anyone except themselves. We cannot even try to live within the bounds of the laws made to guide us, because anything we do that they disagree with will land us in jail or everlasting debt.
