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So Congress is going on the assumption that the industries wont abuse SOPA, but the industry is abusing existing law, which proves their intentions.
Congress is going on the assumption that the people who support SOPA will hire their children and spouses for more lucrative fake employment than will the people who oppose SOPA.
> the industry is abusing existing law

Sounds more like UMG has a deal with YT to short circuit DMCA, which isn't against the law.

I expect that contract requires UMG to demonstrate a copyright claim on video.

In this case, obviously UMG didn't do that, and violated the contract. It's similar to a false DMCA takedown, except that its not against the law.

YT could cancel the contract, sue UMG for damages, or simply fine them if the contract allows that.

My point is no laws were broken.

Intentional misrepresentation for the purpose of gaining some advantage or harming the other party is fraud, and is illegal. If lying about the copyright can be shown to have hurt YT or helped UMG then there may well be a legitimate case there. Not that I'd ever expect to see it prosecuted.
Granted, but what if no intentional misrepresentation happened?

Did UMG ever assert a copyright claim on the video? Or do they have carte-blanche to remove any video they want?

If they asked YT to remove it, that might be fraud, because somebody on YT's side would remove the video on the assumption that UMG had a claim.

But if they just flagged the video for automatic removal, is that fraud? Can you lie to a computer?

If the contract lets them request the removal of any video, I imagine they would be in the clear. If it requires a claim of copyright, then perhaps not.

As for lying to a computer, I think that counts as lying to whatever organization is running it. Try lying to a bank's computer to tell it to transfer money from somebody else's account into yours, for example....

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funny, i played Quake2 with Kim Dotcom (aka Kimble) back in the 90s and he was actually very good at it. He went on to built a couple of scammy businesses, got arrested for insider trading and left germany to resurface as the guy behind megaupload which apparently is very successfull, but still a bit shady ;)

Be aware of this guy, his hands are dirty http://en.wikipedia.org/wiki/Kim_Schmitz

He's paid his debt to society. It seems rather unfair to hold what he was doing nearly a decade ago against him now.

Megaupload abides by the DMCA by taking things down when asked. Just because they don't apparently have an under the table deal with media companies like youtube does isn't a reason to say they're "a bit shady".

Want to know why they are shady? Are you able to find their company information or do they still own that PO Box based in Hong Kong? How can you be sure where the money from Mega Companies will go? Do you think they give (or would never give) anything back to the community by paying taxes or by financing any honest no profit initiative? I doubt it. I am not standing with the corporations but a company like Mega, in my opinion, is not their best answer.
To be honest, that falls completely flat trying to reach my bar for "shady". (Legal) tax avoidance is par for the course these days.
Yes right, companies owning millions of dollars (they have 50 million users a day..) shouldn't pay their share of taxes in times like these. But what if "legal tax avoidance" by such companies was one of the very reasons why you and me are now living in "days like these"? I don't want to convince you, I know I can't, but just consider it if you can.
Legal tax avoidance in the United States (I'm not American - qualifier) is a common trait throughout most large businesses. If anything, taking part in avoidance would put Megaupload into the same company as GE, Wells Fargo, DuPont, Boeing, Honeywell... All companies who had revenue in the hundred of millions and billions of dollars, yet still received Government rebates.

http://www.dailymail.co.uk/news/article-2073743/Revealed-The...

Furthermore, Google does +2 billion queries daily yet they still only pay between %2-3 in taxes.

http://www.theatlantic.com/business/archive/2010/10/googles-...

I'm not saying it's right. I'm just saying that it doesn't make Megaupload "shady" for using these legal loopholes.

Furthermore, most people in the piracy "scene" know not to use Megaupload because of their quick compliance with DMCA takedown notices - something that's come over years of investment in their technology and takedown procedures. Anything but shady in my opinion.

Exactly what mMark has said.

I am in no way approving of the practice, I'm just saying that it is not shady. It seems for some unknown reason most people have already decided megaupload is shady, and have to start stretching when asked why.

As others have mentioned, Google makes way more money than Mega and has structured their company in such a way to pay very, very little tax. That's legal tax avoidance, the same thing you're complaining about with Mega, and they certainly wouldn't qualify as shady by your definition.

Face it, paying the least amount of tax possible is just another form of optimization, and something most tech people appreciate.

Mark Zuckerberg called his users "dumb fucks" and hacked his competitor and several school journalists' email accounts. Yet we don't hold that against him today. Kim has proved that he's changed, so don't criticize him for past events.
You cant really compare that to screwing people for millions of EUR on purpose multiple times and going to jail for it, but oh well.
I can certainly compare privacy violations to screwing a couple people out of their money. In fact, I'd say Zuckerburg's (alleged) crimes are far worse and that it's a damn shame he hasn't served time.
It is quite clear to me that YouTube is a private property and as such it has no obligations to host anything it doesn't want. This is not a 1st Amendment issue or even a DCMA issue, if UMG had a contractual agreement with YouTube, whereas MegaUpload might not.
Interesting...

It looked like UMG had made a strategic mistake in issuing takedown requests for content they didn't own, but this could potentially be a win for them on a much larger stage.

If, as they claim, their contract with Youtube gives them the right to take down content they have no rights for, and that contract will necessarily be revealed in discovery, then Google comes out of this the biggest loser by far. UMG gets off scot-free in the Mega case and Google loses the trust of users and content creators. I wouldn't be surprised if the content industry views anything that hurts Google at this point as a win for them.