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Megaupload file-sharing site shut down

Megaupload, one of the internet's largest file-sharing sites, has been shut

down by officials in the US.

The site's founders have been charged with violating piracy laws.

Federal prosecutors have accused it of costing copyright holders more than

$500m ( 320m) in lost revenue. The firm says it was diligent in responding to

complaints about pirated material.

In response, the hackers group Anonymous has targeted the FBI and US Department

of Justice websites.

The news came a day after anti-piracy law protests, but investigators said they

were ordered two weeks ago.

The US Justice Department said that Megaupload's two co-founders Kim Dotcom,

formerly known as Kim Schmitz, and Mathias Ortmann were arrested in Auckland,

New Zealand along with two other employees of the business at the request of US

officials. It added that three other defendants were still at large.

"This action is among the largest criminal copyright cases ever brought by the

United States and directly targets the misuse of a public content storage and

distribution site to commit and facilitate intellectual property crime," said a

statement posted on its website.

The FBI website was intermittently unavailable on Thursday evening due to what

officials said was being "treated as a malicious act".

The hackers' group Anonymous said it was carrying out the attacks.

The Motion Picture Association of America's website also suffered disruption.

Third-party sites

The charges included, conspiracies to commit racketeering, copyright

infringement and money laundering.

A federal court in Virginia ordered that 18 domain names associated with the

Hong Kong-based firm be seized.

The Justice Department said that more than 20 search warrants had been executed

in nine countries, and that approximately $50m ( 32m) in assets had been

seized.

It claimed that the accused had pursued a business model designed to promote

the uploading of copyrighted works.

"The conspirators allegedly paid users whom they specifically knew uploaded

infringing content, and publicised their links to users throughout the world,"

a statement said.

"By actively supporting the use of third-party linking sites to publicise

infringing content, the conspirators did not need to publicise such content on

the Megaupload site.

"Instead, the indictment alleges that the conspirators manipulated the

perception of content available on their servers by not providing a public

search function on the Megaupload site and by not including popular infringing

content on the publicly available lists of top content downloaded by its

users."

Before it was shut down the site posted a statement saying the allegations

against it were "grotesquely overblown".

"The fact is that the vast majority of Mega's internet traffic is legitimate,

and we are here to stay," it added.

"If the content industry would like to take advantage of our popularity, we are

happy to enter into a dialogue. We have some good ideas. Please get in touch."

Blackouts

The announcement came a day after thousands of websites took part in a

"blackout" to protest against the Stop Online Piracy Act (Sopa) and the Protect

Intellectual Property Act (Pipa).

The US Chamber of Commerce has defended the proposed laws saying that

enforcement agencies "lack the tools" to effectively apply existing

intellectual property laws to the digital world.

Industry watchers suggest this latest move may feed into the wider debate.

"Neither of the bills are close to being passed - they need further revision.

But it appears that officials are able to use existing tools to go after a

business alleged to be inducing piracy," said Gartner's media distribution

expert Mike McGuire.

"It begs the question that if you can find and arrest people who are suspected

to be involved in piracy using existing laws, then why introduce further

regulations which are US-only and potentially damaging?"