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Exclusive: MegaUpload Issues Response to RIAA Over Mastercard Cutoff

Exclusive: MegaUpload Issues Response to RIAA Over Mastercard Cutoff

Yesterday, we reported on the RIAAs efforts to get Mastercard to cut off payments to MegaUpload. Today, we have received an exclusive response from MegaUpload on this news.

Blocking so-called “rogue websites” isn’t necessarily in the law books in the US yet, but things are heating up between the RIAA, MPAA and several websites they accuse of facilitating copyright infringement. Some of these sites, it turns out, are cyberlockers – websites that host large files for their users and allows for many to download those files as a side bonus of saving some companies bandwidth costs. Some note the recent strategy of pressuring payment methods to cut off funding from websites they accuse of duping consumers into paying for pirated content as a more recent change in strategy in the organizations strategy to fight piracy.

At issue specifically is the effort by the RIAA to get Mastercard to block payments to MegaUpload.

“MasterCard in particular deserves credit for its proactive approach to addressing rogue Web sites that dupe consumers,” Mitch Glazier, vice president of government and industry relations of the RIAA said. “They have reached out to us and others in the entertainment community to forge what we think will be a productive and effective partnership.”

It’s quite a statement that sparked an even more interesting statement from MegaUpload, one of the sites explicitly mentioned among these “rogue websites”

“Are payment processors trying to become the legislature of the new decade?” Bonnie Lam of MegaUpload Headquarters asks, “Will it be them, rather than elected governments, who decide what’s right and what’s wrong? Will ballots be replaced by wallets, will people cast their votes by choosing a conservative or a liberal credit card? First WikiLeaks, then cyberlockers – what’s next, and where will it end? Will you no longer be able to settle your ISP bill by MasterCard, as your carrier of choice may profit from copyright infringement?”

“We are watching the unfolding events with interest,” Lam told ZeroPaid, “but as the vast majority of our revenue is coming from advertising, the effect on our business would be limited.”

Ouch. Not quite the effect the RIAA or MPAA might have hoped with their recent actions.

Lam continued to defend MegaUpload, “Megaupload is a legitimate business operating within the boundaries of the law. In five years of operation we have not been sued by a single content owner. If the RIAA or MPAA would have legal grounds they would have taken us to court by now. We suggest that they attack us within the legal system and stop labeling us until they have something to show.”

It is true that the RIAA and MPAA have yet to try to litigate the company. It would indeed be hard with a copyright complaints system in place in that website where if a copyright holder sees their infringing material on MegaUpload, they can have the link taken down.

“Mega has over 100 million registered users,” Lam continued, “over 45 million daily unique visitors, employees of over 70% of the worlds fortune 500 companies have accounts with us.
We host over a billion legitimate files. Documents, backups, photos, everything. If Mastercard turns against Megaupload they will have a problem, not us.”

Indeed, it’s hard to see anyone who would lose out in all of this other than Mastercard.

One things for sure, things could get quite interesting in the weeks ahead between Mastercard, MegaUpload and the RIAA should these tensions keep rising.

We would like to thank Bonnie Lam for taking the time to respond on this issue.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at [email protected].

Drew Wilson
Drew Wilson is perhaps one of the more well-known file-sharing and technology news writers around. A journalist in the field since 2005, his work has had semi-regular appearances on social news websites and even occasional appearances on major news outlets as well. Drew founded freezenet.ca and still contributes to ZeroPaid. Twitter | Google Plus
Titleist AP2
Titleist AP2

Pretty! This was a really wonderful article..Thanks once again for the push!

carlos
carlos

Definitivamente la RIAA ha logrado involucrar a muchos en una cacería de brujas. Han encontrado que controlar el Internet es solamente a través de leyes, acciones legales, de punishment, de enforcement. Se les olvidó que la Internet es un nuevo canal de comercialización y ni siquiera han tratado de crear modelos para lograrlo y evitar así el acabar con la libertad en Internet que es lo que permite la evolución de las tecnologías en el mismo para beneficio de la humanidad.

disinter
disinter

"Ah so you do have the means to check what’s legit and what is not? Standard reply from you on keeping a watch on infringing files is that it’s impossible to do but I guess when it comes to legit users / files it suddenly is."Um, I think their point on that is that if some fortune 500 company has an account or several, it's a safe bet these accounts are all legit. It's very doubtful that a fortune 500 company is uploading pirated files. Plus alot of accounts probably hosts very small files which are likely data aka paperwork backups. Any 1.k zip file is almost certainly NOT a movie or an mp3. Nice try though. Come back later with another "theory" about file sharing for us to consider but please don't make it so easy to blow out of the water.

The shade
The shade

We already saw what average people helping real hackers can do to the bigger enemies of the people can do. Wikileaks is the biggest new of the entire 10 years after 2000, they showed the many how to organize against the ones who force us into servitude.

Zeng Peets
Zeng Peets

I think its about high time someone take the RIAA down for good!

XD
XD

“Mega has over 100 million registered users,...........We host over a billion legitimate files"Ah so you do have the means to check what's legit and what is not? Standard reply from you on keeping a watch on infringing files is that it's impossible to do but I guess when it comes to legit users / files it suddenly is.I can understand the need for file hosters, heck I can even understand the basic need to try to get stuff as cheap / free as possible, but services like MU acting like they're build on doing legal business only is quite funny if not as arrogant as it gets for someone who tries to make money of someone else' work.

san
san

Wow, seriously? I've been using Megaupload for a couple years to send and receive files that are too big to send via email. It's a very useful site, and if people are using it for piracy, those people need to be punished, not people like me, who use it for work.

NIck Fortune
NIck Fortune

@Mark: I think there's a distinction being drawn here between "within the law" and "within the legal system". One means not doing anything illegal, the other using the courts to seek redress.The **AA have acted within the law in recruiting MC to their cause (at least until such time as someone demonstrates otherwise in a court). On the other hand, they are not doing it within the legal system.Basically, MU is saying "if you got a case, sue us!" The fact that this hasn't happened already suggests that legally, MU are doing nothing wrong.Of course, there's a whole nother argument to be had on the distinction between "legally wrong" and "ethically wrong" and one that applies to both sides of the debate

Macondo
Macondo

Wow, what a great reply by MegaUpload!It's nice to see that some people are still willing to stand up to the giant bullies of the digital era, and flip them off in style.I feel now very much inclined to get myself an account

me
me

This is not about copyright infringement this is about media company's attacking the internet. They want you to be watching TV, going to the movies and renting DVD they don't want you entertaining yourself on the internet.

Freddie Mercury
Freddie Mercury

MegaUpload claims "the vast majority of our revenue is coming from advertising." However, their prices for membership are nearly identical to everyone else. If they were really getting most of their revenue from advertising then they could undercut the competition with lower prices.Taunting the RIAA/MPAA is not a good idea. I think somebody at MegaUpload has a big ego and a big mouth to go with it and they might be saying things they will regret.

My money
My money

I dont see where they got off with this shit... If I want to go the my neighborhood crack dealer and hook up a big fat 8 ball wtf does mastercard care so long as I pay my bill.... I.. not riaa cria etc pay may bill so eff off

Mark
Mark

It seems to me that they *HAVE* gone after them within the legal system, by convincing MC to not honor payments to them. As that's not illegal, they've worked wholly within the legal system to accomplish their goal. If Megauploads feels differently, they are welcome to try to sue the RIAA and the MPAA for lost revenue... an amount that is even liable to be quite provable. I don't know how likely it'd be that they'd win though.

disinter
disinter

Ha doughboy no shit. Soon if people quit using mastercard, the mafiAA will likely tell everyone how piracy is hurting the credit card business.

Doughboy
Doughboy

I say let Mastercard and even Visa do this. Eventually someone will see the gap and start a credit card that will allow these purchases. So I say go for it because it will hurt them in the end anyways.

disinter
disinter

My cable company came to hook up my cable about a year ago and I asked if I could pay the installation with a credit card and he said, "Yeah we take all credit cards except mastercard". So for some reason (even though I never had a mastercard in my life) I asked "Why not mastercard?" and he said, "They are jerking companies around, they expect us to give them a part of the profits we make when someone uses one so we just blacklisted them and won't accept them anymore". I said, "Damn that sucks, companies must be dropping them left and right" and he replied, "Yeah they are taking a major hit over this.". So with that kind of idiotic "Hey let's fuck our customers until they don't use us anymore" policy it's no wonder they are the mafiAA's favorite credit card company.

streisand effect
streisand effect

i believe i will be trying this megaupload having read such good things from them and you. always great to see a good company turn attacks into sales. mafiaa could take a note. but they wont. what is it about mafiaa? its like they buy these insane laws, and then think anyone should abide by it because "its the law". get over it mafiaa. u had ur chance and u decided buying politicians and sh*ting on ur customers was awesome cuz u owned ALL the music and noone could do anything bout it. well whos so smart d*ckwads? whos so smart now? noone will EVER buy from you again, and u deserve it, and ur lucky us netizens are such good guys, or wed give u what u deserve, and not merely boot u off our interwebs

Blixx
Blixx

I hate corporate activism worse than just about anything I can think of. Mastercard is saying that they are for the wealthy big media companies and against the American people. Who the hell does Mastercard think they are telling the American people what we can buy or read or watch? Orwell is rolling over in his grave and I'm cutting up my mastercard.

mRuss
mRuss

hey Editor, watch the typo of "rogue" appearing as "rouge". Websites that sell rouge and other cosmetics are not (yet) in the RIAA's crosshairs.

TerribleTony
TerribleTony

"Rouge" websites? What, French red ones? Even I like the French more than that!Or should that be "rogue"? :p =)

disinter
disinter

WOW! Just a personal note on this, I've had several paid accounts with rapidshare, hotfile, megaupload and other various storage sites in the past and megaupload is the best hands down. Not only that but they are also the best when it comes to free accounts unlike rapidshare and other accounts that are virtually useless to a non-paying member. Plus knowing that they've never been sued makes me more confident in using them but I truly believe they just shot themselves in the foot by pointing it out. The mafiAA will likely view this as taunting and will be getting the evidence they need and then WILL file some sort of suit.

Drew Wilson
Drew Wilson

I think you could have a chance at making that argument that a cyberlocker is making a profit off of pirated content if there is no mechanism to remove that content from their servers. In this case, MegaUpload does have a mechanism that suits that purpose. In fact, a lot of pirates have switched long ago to other cyber lockers for the simple reason that copyrighted material gets removed from the MU servers too quickly (ala, it takes only few hours before a copyright holder or someone working on behalf of that holder to find that material being posted on there and they issue a takedown notice and by the time the day is out, that material is gone.) It's too much work to keep re-uploading those same files over and over again every day anyway, so many pirates simply go on to other services that care way less about copyright.

Jared Moya
Jared Moya

I think having a file-hosting service determine what is or is not legal is not the way to go, especially being that the definition of such varies from country to country and thus from user to user. It's okay, for example, for a user in Spain to share copyrighted material if not for commercial gain, but not in the US.

FreeRepublicUnited
FreeRepublicUnited

"Taunting the RIAA/MPAA is not a good idea"Quite right. I think it would be better if we hang these little Nazi bastards upside down by the ankles, lop off their fucking testicles with a rusty carving knife and shove them down their goddamn throats.The RIAA and MPAA have no right to exist in any capacity."Don't threaten to do something; just do it."

Drew Wilson
Drew Wilson

Hey Marcelo,Cool! Thanks for translating this! :)

Mojo
Mojo

@ disinter yea but the evidence they need would be extremely hard to collect. megaupload cannot be reasonably expected to check all the files that are uploaded to them (millions and millions, to be sure). there already is a system for reporting infringing material, and i'm sure they are more than behind in checking the reports, and they also take down that material if it does infringe.however, what they said is wrong: money is power, and everyone (including companies) can make the decision about what they think is ethical/legal/whatever, and provide or deny their service to whomever they damn well please. whether that decision impacts the people making it negatively is their problem, and not anyone elses.



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