File-sharing site execs nabbed in anti-piracy bust

Federal authorities in the United States have shut down one of the world’s largest file-sharing sites, and its founder and six others have been charged with violating piracy laws.

Megaupload founder Kim Dotcom was arrested in New Zealand Thursday along with three other top executives at the request of U.S. authorities. Three others facing charges remain at large.

A statement by the U.S. Justice Department and FBI said the action is among the largest criminal copyright cases ever brought by the United States. If found guilty, the suspects face up to 20 years in prison. Authorities say Megaupload cost copyright holders more than $500 million.

Megaupload allowed users to upload and transfer very large files. Federal officials say the Web site used this ability to make copyrighted material, like Hollywood movies, available for free, often before the film was even released in theaters.

But the company, and many celebrity supporters, say the site was mainly used for legitimate file transfers.

The arrests follow Wednesday’s widespread online protest of anti-piracy legislation under consideration in the U.S. Congress. News of the Megaupload bust prompted a protest, from the hacker group known as Anonymous, which took down several Web sites, including that of the Justice Department and the Federal Bureau of Investigation.

The online blackout Wednesday whittled away support for The Stop Online Piracy Act currently before the House of Representatives, and the Protect IP Act under consideration in the Senate.

Online encyclopedia Wikipedia blacked out its English language Web site for 24 hours, as did the popular blog, Boing Boing. Social news Web site Reddit also went dark for part of the day. Popular search engine Google joined other Web sites that, instead of going dark, posted editorial comments. Google replaced its normally colorful and interactive logo with a black censor bar and directed users to a petition against the legislation.

For now, the bills are pitting the entertainment industry, which sees online pirates increasingly eating away at profits, against technology companies that see the bills as a burden and threat to future growth.

The blackout caused some U.S. lawmakers to withdraw support for the bills and the speaker of the House of Representatives, Republican John Boehner admitted Wednesday that there was now a lack of consensus on the measures.

Last week, the White House acknowledged online piracy by foreign Web sites is a serious problem that requires a serious legislative response. But a statement said, “We will not support legislation that reduces freedom of expression, increases cybersecurity risk or undermines the dynamic, innovative global Internet.”

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