As if to show that the U.S. acting for lobbyists of the recording industry can shut websites without any new laws, authorities shut down MegaUpload a very popular file sharing site. Authorities claim the site violates existing piracy laws.
Police in New Zealand working with U.S. authorities arrested the two co-founders of the website and two other staff members. A New Zealand detective inspector said about 70 police were involved and raided 10 properties.
Prosecutors call the group a Mega Conspiracy insisting that the scheme costs copyright holders more than half a billion dollars and is earning 175 million in subscriptions and advertising. If convicted the group could face long prison sentences on several charges.
MegaUpload has itself been in a court battle with the Universal Music Group. That group forced You Tube to take down an ad for MegaUpload because they claimed that it violated copyright. But the ad was made for MegaUpload by artists who also were under contract with the UMG group. MegaUpload was taking UMG to court claiming that it wrongfully forced You Tube to remove their ad.
The timing of the U.S. action is suspicious since it comes just after an entire day of protests by many groups against the SOPA anti-piracy act. Groups such as Anonymous were quick to react.
The U.S. justice department website was attacked by hackers as well as sites belonging to the recording industry trade groups and Universal Music Group. Government action in shutting down sites is not going to be costless. While the MegaUpload group may be getting rich off their racket the other side get even richer by legally gaining monopoly rights to artistic works.
Many artists actually favor the file sharing sites since they make their work much more widely available. Some public celebrities have voiced support for MegaUpload without being paid to do so. Shutting down sites such as MegaUpload many regard as simply attempts to censor the internet. For more see this Al Jazeera article and also here.
For defenders of free markets copyright and patents have always been theoretically problematic. Copyright and patents both restrict production and trade and the free flow of knowledge in the interests of returning profits to the monopoly patent or copyright holder. The result is that black and grey markets develop as the market system works to destroy the monopoly powers. Hence the state must intervene to protect the monopoly. You then get the ludicrous situation where Free Trade agreements have at their core monopoly Intellectual Property Rights. Such Rights are key to the expansion of global capital and even without world government means will be found to enforce such rights as the coöperation between New Zealand and U.S. authorities shows.
In all this the consumer has no power. The consumer to purchase legally must pay the price set by the monopoly copyright holder. But the grey and black markets offer cheaper prices often for the same quality product. It is hardly surprising that there is often much popular support for sites such as MegaUpload.