Megaupload fans flock to rival file-sharing services after FBI shuts down site and arrests founder



Instead of abandoning file-sharing, users flock to rival sites
Huge surge in traffic to rivals such as Rapidshare
One site, 4Share is twice the size Megaupload was before it shut down
By Rob Waugh


After the FBI shut down file-sharing site Megaupload and charged staff such as flamboyant founder Kim Dotcom - formerly Kim Schmitz - with copyright violations, users have flocked to rivals such as RapidShare, Hotfile and 4Share.

If the American authorities hoped that the move would dent the popularity of such 'cyber-locker' sites, they have been mistaken. Rival sites have seen a huge spike in traffic. One site, 4Share, is now twice the size Megaupload was before it shut down.
4Share has 2.5 billion page views per month, and 10million registered users.

It is currently the subject of legal action in New Jersey, with a firm, Modulo Security Solutions, seeking to reveal the identities of individuals who uploaded and shared confidential documents.

The 'cyberlocker' sites let users store large files and download them from anywhere.

MegaUpload, which the U.S. government shut down, is a Hong Kong-based ‘cyberlocker’ service that allegedly allowed users to download pirated films, TV shows, music and e-books with just a few clicks.
It is accused of costing copyright owners £322million in lost earnings and of making £113million by selling advertising and premium subscriptions.

A graphic created by web-monitoring firm Alexa showing the leap in traffic to 'cyberlocker' sites Hotfile, Uploaded.to, Depositfiles.com and Rapidshare.com

The traffic surge following Megaupload's closure is an embarrassment to many of the firms involved.

Such sites are keen to emphasise their legality in the wake of Megaupload's difficulties.
'This case has a great negative impact on file storage services and the Internet overall,' a 4Shared spokesman said.
'4shared has some of the most strict house rules among all other file storage services and there’s no need for any changes.'
Cyberlocker sites are legal, and operate in the same way as YouTube - ie they take down illegal files whenever told to by copyright holders.

As with YouTube, the volume of files means that every upload cannot be manually inspected.

Megaupload is accused of knowingly violating copyright.

Several Megaupload staff were arrested in New Zealand last week on copyright charges. The FBI also allege that the site was used for money-laundering.

Its founder, 'Kim Dotcom' - formerly Kim Schmitz - owned a £3million collection of 25 cars which was confiscated at the time of his arrest – mainly top-of-the range Mercedes with number plates such as ‘STONED’, ‘HACKER’ and ‘GUILTY’ but also including Maseratis, a vintage pink Cadillac and Dotcom’s runabout, a £300,000 Rolls-Royce Phantom with the number plate ‘GOD’.

Although music stars such as Kanye West and Alicia Keys have supported MegaUpload, film and record companies say the seven-year-old file-sharing site is making a fortune off their work without paying them a penny.

Hollywood film companies have been the main victims of piracy. The seven accused MegaUpload executives – including two other Germans and a Dutchman also seized in New Zealand – are each charged with five counts of racketeering, copyright infringement and conspiracy, and could be jailed for up to 20 years.