Today, popular BitTorrent index BTjunkie shut itself down to preempt legal action of the type experienced by the Pirate Bay, Megaupload and others. The seven-year-old site may not have been squashed directly by authorities, but it is nonetheless good news for the RIAA, MPPA and other opponents of online piracy.

Separately, the Swedish Supreme Court recently upheld the sentences of three Pirate Bay cofounders who were convicted of copyright infringement in 2009.

Battling Piracy in a Post SOPA-World

Apparently by pure coincidence, the Megaupload shutdown came one day after large-scale online protests against SOPA and PIPA, the proposed anti-piracy legislation. The timing of the crackdown raised a few eyebrows, as well as questions about why SOPA would have been necessary in the first place.

SOPA and PIPA may be shelved for the time being, but the war between the content industry and the parts of the Internet that they perceive to encourage copyright infringement is far from over. The next battle may be legislative, or it may rely on civil or criminal law. In some cases, the aftershocks of previous strikes will be enough to shake other perceived enemies from their positions, as happened in the cases of BTjunkie and FileSonic.

The counterstrikes in these battles have come in occasionally dramatic flavors such as the DDoS attacks from Anonymous that followed the Megaupload shutdown. More subtle - and far more powerful - is the mass migration of users from one service to another as authorities engage in what appears to be one giant game of Internet whack-a-mole.

There have been recent successes, but the very nature and structure of the Internet raises questions about the longterm effectiveness of this approach. As we saw with SOPA, any attempt to tinker with that structure will be met with fierce resistance.

Photo by Mike Baird.

Yesterday, news broke that the data could be at risk of deletion as early as this week, if Megaupload's former hosting service providers decide to do so. Well, not if the Electronic Frontier Foundation has anything to do with it.

For Megaupload Users, an Unclear Way Forward

Exactly how they will manage to resolve the issue is unclear at this early stage, as there are a number of technical and legal hurdles to overcome. A resolution could come in the form of a lawsuit against authorities, as has already been threatened by other groups. Alternatively, it could involve cooperation between the EFF, Megaupload, the hosting service providers and federal authorities, EFF Staff Attorney Julie Samuels told us.

"Right now the possibilities are almost endless," Samuels said. "We are open to anything." Whether legal or more diplomatic, the organization is seeking justice for the Megaupload users who were blocked from accessing their personal files despite not having broken any laws.

The Megaupload saga has put some users in a very weird position. Because the shutdown of the site happened without warning, they had no chance to retrieve any legitimate, non-infringing files they may have been storing there.

Uniquely Screwed

Of course, it also meant that people who were using the site for illegal purposes couldn't jump on and download the last season of "The Wire" real quick. Still, there's nothing stopping people from using MediaFire, RapidShare, the Pirate Bay or any number of other sources to grab copyrighted content. The users who kept personal files on Megaupload can't just tap into another service and get access to that content. They are uniquely screwed.

Normally, as Samuels explained, actions like this are taken using civil lawsuits rather than police helicopters and FBI agents. Thus, there's typically time for users to take the necessary precautions to back-up any files they couldn't afford to lose. Putting aside debates about the wisdom of keeping personal files exclusively in the cloud in the first place, the users of Megaupload never had an opportunity to salvage their stuff.

"That's what's really fundamentally troubling here," Samuels said. "People woke up, went to turn on their computer and found that they could not access their accounts."

Like the legal case of Kim Dotcom and his associates, it will be some time before this affair is resolved. For now, the EFF is hoping to open a dialogue with former users of the site and work with all of the parties involved in order to eventually come to a conclusion that works for everyone.

TechCrunch reports today that the Megaupload crackdown cut the site off at the knees just before it planned to launch a disruptive and legal music player. Another popular boogeyman for copyright holders, The Pirate Bay, announced a new, legitimate direction yesterday: It's going to host physibles, downloadable models for constructing 3D objects. Are the "pirate" sites actually Big Content's worst nightmare for legitimate reasons?

A "physible" is a digital plan for an object that can either be designed on a computer or uploaded with a 3D scanner. Those plans can be downloaded and used to assemble real, tangible objects using a 3D printer. Printers are getting more affordable, but they're still limited by the kinds of materials they can use. But that just means it's the dawn of this technology, and The Pirate Bay is getting in early. "We believe that in the nearby future you will print your spare [parts] for your vehicles," TPB writes on its blog. "You will download your sneakers within 20 years."

"The benefit to society is huge. No more shipping huge amount of products around the world. No more shipping the broken products back. No more child labour. We'll be able to print food for hungry people. We'll be able to share not only a recipe, but the full meal. We'll be able to actually copy that floppy, if we needed one."

As a renowned hub for trading files, The Pirate Bay is in a perfect position to be the go-to place for free physibles, which it can facilitate while making money from ads. "We're thinking of temporarily renaming ourselves to The Product Bay," the announcement jokes, but hopefully it's half-serious.

It's a perfectly legitimate business, and it blows the 2012 conception of intellectual property to smithereens. There's competition, too; Shapeways and Thingiverse are already on the market, and there's even a Google Warehouse for 3D models. Lobbyists for Old Media love to bang on sites like Megaupload and The Pirate Bay, but those very sites have hatched plans to usher in the future of digital media. When we can download a drum set, pirated MP3s will be the least of the copyright lobby's worries.

Check out The Pirate Bay's physibles category, but it's not our fault if you click on porny spam links.

Some companies that are perceived, correctly or not, of having a similar model to MegaUpload's are now scrambling to prevent their own demise now that that the legitimacy of that model has been very publicly - and dramatically - challenged.

Popular sites like FileSonic and FileServe are preventing users from downloading files uploaded by anybody other than themselves. Uploaded.to, another service used for hosting and sharing files, has stopped accepting users from U.S.-based IP addresses all together. In total, Evolver.fm's Eliot Van Buskirk counted nine different file-hosting services that have made some kind of substantial change to their functionality since the MegaUpload shutdown.

Where's the Line?

MediaFire and RapidShare, both of which are often used to host and download copyrighted content, have gone on the offensive, giving statements to the press that attempt to draw the line between their models and what MegaUpload was doing.

"We don't have a business built on copyright infringement," MediaFire CEO Derek Labian told VentureBeat, adding that his company is more akin to services like DropBox and Box.net than it is to MegaUpload. There's little reason to doubt him, as much of what has surfaced about MegaUpload's operations has turned out to be rather shady. MediaFire, by contrast, claims to have solid relationships with many of the relevant federal agencies.

Similarly, RapidShare has been quick to distance itself from MegaUpload and paint a stark contrast between the two services. The company, which recently released a native app for iOS, put out a statement explaining that they "differ from services such as MegaUpload in many crucial points," most notably that they've always been transparent about their company's location and the identities of the people running it.

Each of these services is different in terms of its functionality and legal compliance, and it would appear that those with the least confidence in the integrity of their own model are taking measures to scale things back a bit.

If the charges are to be believed, what MegaUpload was up to was particularly egregious. Still, the whole affair raises questions about where the line is. People can use any number of mechanisms for sharing files with each other, including copyrighted material. If the FBI can raid MegaUpload and shut it down, what's stopping the authorities from going after other services?

While the site's owners long argued that they were legally protected by the "safe harbor" provision of the Digital Millennium Copyright Act (DMCA), federal authorities in the United States evidently saw things differently and have arrested four people connected to Megaupload and charged them with online piracy. Three other people are still at large.

The Justice Department's indictment against Megaupload, which it refers to as a "a worldwide criminal organization," accuses the company of money-laundering and costing the content industry over $500 million by enabling large-scale piracy.

The timing of the shutdown, while authorities say it's coincidental, is nonetheless interesting. The debate about online piracy and how best to deal with it culminated in a massive, primarily Web-based protest against the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), which would force ISPs, ad networks and search providers to block access to sites like Megaupload. Many (okay, everybody) in the technology industry fear that the proposed laws' more broad provisions could lead to legitimate sites being taken down and result in Internet censorship. In essence, SOPA would make it much easier to take down sites like Megaupload, without having to involve the FBI.

This comes just a month after Megaupload found itself in an unusual squabble with Universal Music, which had successfully lobbied YouTube to remove a pro-Megaupload music video, despite the fact that it did not violate anyone's copyright. The video, which was commissioned and produced by Megaupload, featured prominent American music stars praising the service for its convenience and ease of use.

As controversial as the site is, Megaupload has proven popular among some musicians who view it as an effective way to distribute and promote their work. Major players in the film and music industries have long seen things quite differently.

For those artists and consumers who liked and used Megaupload, the party appears to be over. As of today, the megaupload.com domain returns nothing but a blank page, as it is one of 18 domains seized by authorities, according to the New York Times.

The U.S. Justice Department has published a press release detailing the charges and arrests. This is said to be "among the largest criminal copyright cases ever brought by the United States," and one that spanned continents with arrests being made in New Zealand and search warrants being executed in nine different countries.

The Sustainable Economy Law, which contains the anti-piracy provisions, was enacted in part to help encourage investment by U.S.-based media and technology companies. Today it was revealed that American interest in the law being enacted may have been more than casual. Spain was actually threatened by the US with being put on a trade blacklist if the law wasn't passed, according to cables released by WikiLeaks.

The revelations confirm what many had suspected about the extent of U.S. involvement in encouraging the legislation. It also says a thing or two about the influence of the media industry and its lobbyists, which apparently goes well beyond domestic initiatives like SOPA itself.

Last month, as the administration of Spanish President Jose Luis Rodriguez Zapatero was on its way out of office, the U.S. Ambassador evidently ramped up pressure on the government to enact the anti-piracy law, which was crafted with help from the U.S. government. The Zapatero government declined to cave in to the pressure, but Spain's newly sworn-in administration made it a top priority and officially made it law last Friday.

Explains TorrentFreak:

In the letter, which was also sent to Minister of Culture Ángeles González-Sinde after whom the law is named, Solomont noted that Spain is already on the Special 301, the annual report prepared by the Office of the United States Trade Representative (USTR) detailing 'trade barriers' based on intellectual property issues. Solomont's threat was that should Spain not pass the Sinde Law (described by some as the Spanish SOPA) then the country would be degraded further and placed on the Priority Watch List. This serious step would mean that Spain was in breach of trade agreements and could be subjected to a range of "retaliatory actions".

The state of online music sales for independent artists may not be as abysmal at it feels though, according to some data recently shared by Bandcamp. The artist promotion and e-commerce site found that some of their paid music downloads were being initiated by users who had searched explicitly for pirated content.

Bandcamp didn't offer hard, aggregate data about how often this is happening, so it's largely anecdotal evidence. Still, it appears to bolster the argument that if digital content is made easily available, many of those who want it most will pay for it. It's a notion recently tested by comedian Louis C.K., and so far the results look very positive for artists and content creators.

C.K., just like independent artists on Bandcamp, did not thwart piracy all together. That's not the point. Illegal downloads still take place all day long, and probably always will as long as the Internet is intact. But what's emerging lately are signs that many will in fact pay for content online, if it's easy and convenient to do so. An increase in that tendency, combined with new and innovative ways of monetizing one's work, may well represent the future of some creative industries, or could at least infuse them with a host of new self-sustained talent.

Bandcamp is a relatively new, if quickly emerging, force in the music industry, and it's one that's geared toward independent musicians. So you may want to take its story with a grain of salt. It's entirely possible that people are no less inclined to illegally download blockbuster albums from major label acts. It may just be harder for some to feel guilty about it.

Even so, the digital future of music is still very much emerging and these early signs of economic viability should serve as some encouragement for those looking to be a part of it.

Once a complaint is made, a judge can order ISPs to block access to sites that host copyrighted material or have them shut down entirely. The law, which was officially passed early last year but never implemented, was approved by Spain's new, more conservative government last week and will now be enacted as planned, much to the delight of the film and music industries, as well as other media companies.

Under the new law, copyright complaints will be heard by a panel called the Intellectual Property Committee who will decide how to rectify the issue and are endowed with the power to go after site owners.

In the U.S., the anti-piracy legislation currently being debating in Congress would be limited to websites hosted outside the country's borders and wouldn't be quite as far-reaching as Spain's new law. Still, to many the passage of SOPA's Spanish counterpart feels like a taste of things to come should big media companies in the U.S. succeed in getting some version of SOPA or the Protect IP Act passed by the U.S. Congress.

Paving the Way For U.S. Investments

Pressure from Spanish copyright holders and media companies wasn't the only factor in ensuring this law was passed. The country stands to see major investments in online streaming services there now that the law is enacted. U.S. media and technology companies, among others, have been waiting to make such investments until more serious steps were taken against file-sharing and online piracy in Spain. The passage of this law is exactly what they were waiting for. The country is already awaiting the launch of Nextflix within its borders early this year, and presumably more services will follow.

The law may lead to more legitimate online streaming services and delight the media industry, but that doesn't assuage the concerns of digital rights groups, who take issue with SEL along lines similar to those of opponents to SOPA and PIPA in the United States. In short, they argue that granting media companies and judges the ability to shut down websites sets a very bad precedent and could easily be used to censor legitimate sites.

If Congress was going to choose to agree on something, why would it choose a bill that everyone from big Internet companies like Google and Facebook to free speech advocates to the pharmaceutical industry say is a bad idea? Or, as New York Times media columnist David Carr notes in today's editions, "You can see why big Internet guys are upset by SOPA. Maybe you and I should be, too."

Carr points to a potential, all-too-obvious reason why some lawmakers may be supporting a bill that, outside of the Beltway, seems to primarily appeal to traditional media companies. Those companies, according to campaign finance tracking Web site MapLight, gave four times as much to the bill's sponsors as corporate contributors based in Silicon Valley.

If you need more reason to feel cyncial about politics on a post-holiday, Monday morning, check out last week's report from TorrentFreak that found Congressional staffers were illegally downloading everything from movies to adult self-help books as many of their bosses tried to push SOPA through.

Debate on the bill will resume on Jan. 17 and the Senate could take up the measure as soon as Jan. 24. The bill currently has 31 bipartisan co-sponsors and, according to a press release issued last month, growing support. See an earlier RWW post for everything you need to know about SOPA, including links to lists of companies and lawmakers that support and oppose the bill.

In the statement published on its website, Go Daddy maintains that "fighting online piracy is of the utmost importance," reminding us that the company has been working on the legislation. But it admits, in the face of massive boycotts, that "we can clearly do better."

Here is the full text of Go Daddy's press release:

SCOTTSDALE, Ariz. (Dec. 23, 2011) - Go Daddy is no longer supporting SOPA, the "Stop Online Piracy Act" currently working its way through U.S. Congress.

"Go Daddy has always fought to preserve the intellectual property rights of third parties, and will continue to do so in the future," Jones said.

Forbes and the Atlantic Monthly are both reporting that coders are already developing work-arounds. A developer calling himself Tamer Rizk launched DeSopa, a Firefox add-on that would allow users to visit sites blocked by the proposed copyright protection measures proposed under SOPA.

SOPA would block access to sites accused of violating U.S. copyright laws. The measure has been called Draconian by opponents who say it would fundamentally change the free-flow of information across the Internet. Proponents, ranging from the NBA to Universal, say the measure is needed to block sites like The Pirate Bay, which flagrantly flaunt copyright laws and make content available for free without paying copyright owners.

This week a House committee suspended debate on the measure until 2012.

"This program is a proof of concept that SOPA will not help prevent piracy," reads a note on DeSopa's download page. "If SOPA is implemented, thousands of similar and more innovative programs and services will sprout up to provide access to the websites that people frequent. SOPA is a mistake. It does not even technically help solve the underlying problem, as this software illustrates."

Or as Reason, the journal of libertarian thought and politics, noted, "SOPA looks like a stunning anti-success: Not only would it undermine core elements on the Internet's architecture, it wouldn't stop much piracy. Indeed...it would probably make the Internet substantially less secure."

Not unsurprisingly, this news does not sit well with many of the Internet's most vocal SOPA opponents, especially on Reddit. A thread that popped up on the site today decries GoDaddy's support for SOPA and encourages users to transfer their domains to another provider. The conversation, which has more than a few choice words for GoDaddy, has grown quite long.

So Why Does GoDaddy Support SOPA Anyway?

"As much as some would like to paint a bleak picture, this debate is not about Hollywood vs. Silicon Valley," reads a statement GoDaddy filed with the U.S. House of Representatives.  "This debate is about preserving, protecting, and creating American jobs and protecting American consumers from the dangers that they face on-line."

GoDaddy goes on to condemn the ease with which people can conduct illegal activity like selling fake drugs and sharing copyrighted material on the Internet today and dismisses concerns about the potential drawbacks of SOPA and the Protect IP Act. Critics claim that this legislation hands too much power over to corporations and authorities to police the Internet and could lead to wholesale censorship online. GoDaddy disagrees.

"This bill cannot reasonably be equated with censorship.  This bill promotes action pursuant to preexisting criminal and civil laws," the company said.  "Not only is there no First Amendment concern, but the notion that we should turn a blind eye to criminal conduct because other countries may take oppressive steps in response is an affront to the very fabric of this nation."

Whatever the logic of GoDaddy's position may be, SOPA critics are not buying it. The calls to boycott the company have begun to spread beyond Reddit and competing domain registrars are using the opportunity to promote their own services. Namecheap, a provider frequently cited in the Reddit thread (Namecheap's social media manager is active in the discussion), has offered up discount codes like BYEBYEGD for users who wish to move away from GoDaddy. Talk of customers moving their domains has even come up in the company's own support forums.

Still, we're talking about a company that has over 50 million domains registered and it's not yet clear how widespread opposition to SOPA is beyond the tech community. Whether or not these efforts will have a sizable impact on GoDaddy's business remains to be seen.

UPDATE: The anti-GoDaddy sentiment has only spread in the last few hours. Y Combinator founder Paul Graham announced that pro-SOPA companies would no longer be welcome at the incubator's Demo Days and other events. Cheezburger CEO Ben Huh has threatened to move more than 1,000 domain names from GoDaddy to another provider and is publicly encouraging Google to reconsider its relationship with GoDaddy as well.

UPDATE #2:Automattic founder and Wordpress creator Matt Mullenweg tweeted a link this morning to GoDaddyBoycott.org, a site that encourages users to sign an online petition against GoDaddy and pledge to transfer their domains away from the service. The site looks to be an extension of Fight For the Future, an anti-SOPA advocacy site.

UPDATE #3: In response to the wave of criticism and boycott threats, GoDaddy has revised its stance on SOPA, announcing that they no longer support the legislation in its current form.

ReadWriteWeb will be keeping a close eye on this story and SOPA developments in general in the days and weeks ahead, so stay tuned for more news and analysis.

Instead, the RIAA is lashing out at Google, whose search engine is the gateway to the Web for hundreds of millions of people. Over the last year or so, Google has been making it a bigger priority to discourage copyright infringement among people who use its various Web services. Those measures, the RIAA has argued, are not enough.

The RIAA isn't satisfied. In a rather scathing "report card" on Google's anti-piracy efforts, the music industry group gave the company an overall grade of "incomplete" and went on to harshly criticize their efforts as being inadequate.

For one thing, the RIAA thinks Google could be investing more time and energy into stopping piracy. The search giant spent $60 million on these efforts, which the RIAA points out is a very tiny percentage of their total revenue. The group argues that other Internet players, such as payment processors and ISPs have done more to combat piracy and that Google has a "special responsibility" to do more.

Tightening the Reins on Android Apps and Users' Takedown Appeals

The organization takes issue with Google's slow removal times for taking down copyright-infringing Android apps. The Android Marketplace, which is less tightly regulated than Apple's mobile app store, leaves more leeway for thing like malware and apps that violate copyright. The RIAA spends a paragraph lashing Google for not being more timely about app takedown requests, but does briefly concede "that Google has improved its takedown speeds for links to infringing files in search results and on hosted blogs to less than 24 hours."

Still, the organization complains that Google makes it too easy for uploaders to appeal takedown notices. If the recent YouTube spat between Universal Music Group and Megaupload is any indication, it would appear that major labels still have the upper hand in that process.

RIAA: Please Censor This, Even Though It's Not Illegal

The RIAA acknowledges where Google has made progress in the last year, but in each case, argues that it could be doing a lot more. For every piracy-related term that has been filtered out of autocomplete, there are a half a dozen that the RIAA thinks should also be tossed out.

For example, their report takes issue with the fact that typing "lady gaga mp3" leads to the autocomplete result "lady gaga mp3 download", which can lead users to sources of illegal downloads. This may be the case, but downloading MP3 files is not an inherently illegal act, so we can understand why Google wouldn't want to censor those terms.

This part of the report is particularly unconvincing. The Lady Gaga example they provide is flimsy and no additional evidence is offered that Google has done a shoddy job of blocking piracy-related terms from autocomplete. We have to imagine this is an ongoing process within Google and one that must carefully balance the interests of rights holders with the sensitivities of Google's users, many of whom will balk at any sign of perceived censorship.

The Devil in the Details: SOPA

Many of the RIAA's demands are not unreasonable. Blatant piracy should be harder to conduct in the Android Marketplace. There are a few of its own policies that Google could do a better job of enforcing.

Still, the report underplays the progress Google has made and has a certain angry, zealous ring to it. When you reach the end of the document, you get a better sense of where some of the frustration is coming from.

"While professing to agree that copyright infringement is a serious problem that needs to be addressed, Google raises alarmist, self-serving criticism to any legislative proposal to deter or thwart rampant copyright infringement."

This is an obvious reference to the Stop Online Piracy Act and legislation like it, which is indeed opposed by Google and most major Web companies, not to mention a growing contingent of the Web's most active and passionate users.

Of course, the opposition to SOPA has little to do with simply not wanting to "stop online privacy" but rather focuses on the broad freedom it gives authorities to shut down websites and the threat it poses to the kind of innovation and creativity that has built the Web we know and love today.

But this week, the label was joined by a few of its industry allies in its fight against Grooveshark. Sony and Warner Music Group are piling on and joining the lawsuit against the service. Since UMG's lawsuit was filed, leaked emails and blog comments from purported Grooveshark employees have shined new light on the extent of the alleged infringement.

As damning as some of the alleged leaks sound, the case is not necessarily a slam dunk against Grooveshark. The company is taking a position not unlike the one used by Google when it successfully defended YouTube from a $1 billion lawsuit filed by Viacom.

The case also bears a slight resemblance to the situation Napster was in a decade ago. When an upstart music service with a legally-questionable method of sharing copyrighted material suddenly finds itself in the crosshairs of the entire major music industry, it could be a matter of time before a judge shuts it down and its owners sell it for parts.

If Grooveshark's executives deliberately tried to build a business on copyrighted material and then use its popularity as leverage during licensing negotiations (as some have claimed), they clearly didn't foresee the rise of legal streaming services like Spotify, Rdio and MOG. Should Grooveshark disappear, any one of those services would offer a good enough alternative, albeit without some of the rare, unauthorized tracks that have found their way onto Grooveshark.

His experiment, as he called it, was to see if he could self-release one of his stand-up comedy specials on the Internet without paying for others to produce, edit and distribute the material, all of which drive up the cost paid by fans. It was a somewhat bold gamble, even if the model had been tested successfully by a few big name bands and musicians. Would it work for stand-up comedy?

This was no YouTube amateur hour, either. Between producing the video and building out the PayPal-powered e-commerce site needed to sell it, expenses for the project were just over $200,000, some of which was offset by ticket sales. To help keep costs down, C.K. directed and edited the video himself. Much of the promotion of the project happened online too, including a Q&A with fans on Reddit.

As C.K. notes, he could have had a third party company produce and sell the material to fans. They would do most of the heavy lifting, but would also pass significant costs onto consumers and come with restrictions on viewing the content.

"This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai," wrote C.K. "I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again."

A Win For the Web, Despite Piracy Risks

By making the video freely available, C.K. runs the obvious risk of having it uploaded to Bit Torrent and otherwise shared freely among people online. And there's no doubt many will do that. Yet his experiment shows that with an established enough brand, artists can produce and distribute their work by themselves, without the need for middlemen and extraneous costs.

It doesn't hurt that Louis C.K. is already a famous comedian who has had plenty of material produced and sold via the traditional approach, from stand-up specials to his ongoing television series. The DIY method may not work for up-and-coming artists at this point, but with developments like these, the Web is proving itself to be increasingly powerful for distributing and promoting one's work. Despite the conventional wisdom, as C.K.'s experiment has demonstrated, it's even possible to get paid.