Those who claimed that shelving SOPA and PIPA in the US would end this quarters' quotient of file-sharing drama may be shocked to see the fallout from Friday's MegaUpload case, where owners and staff of the popular cyberlocker service were arrested and indited for conspiracy to breach copyright on a grand scale. The case has shown the US Federal Court's World-wide reach and willingness to flex these muscles when protecting the interests of content providers, and it's got similar companies running scared.
On Saturday Filesonic, a cyberlocker service similar to MegaUpload but with no content streaming facility, changed their site rules so that files on their servers were only available to whomever had uploaded them. Obviously this also killed off their affiliate program, which gave users a cut of the advertising revenue for generating hits to popular files; the service is also taking the opportunity to scrub their servers of as much infringing material as possible.
In the meantime users of Reddit are reporting the implementation of restrictions on other cyberlocker websites such as Fileserve and UploadBB, as well as Filesonic-owned sites implementing similar changes to their parent. Affiliate programs appear to be the obvious target - they don't want to be seen to both enable pirates and allow them to profit from the illegal activity. Some sites however are going one step further and blocking US users on a geographical basis, an attempt perhaps to stay out of what the US Courts claim as their jurisdiction.
Mainstream services such as Dropbox, who don't allow the same wide access to files for sharing, appear to be unconcerned for now. Other sites such RapidShare claim not to be worried about a raid because they're significantly more pro-active in removing infringing content. Given the litigious nature of the US however, they'd be forgiven a few nervous gulps. Whilst too early to tell, it would not be surprising to see a significant investment drop in start-ups offering similar services over the next few months as potential investors are spooked by threats of litigation.
It's at this point that you're probably wondering why this all matters - who cares if services only used by a few pirates and kids backing up their Spring Break photo's goes out of business? The problem is, a surprising number of businesses and independent traders utilise cyberlocker services for backup and legitimate sharing of files. Losing access to these services, and worse losing access to their own data, represents a genuine restraint of trade which increases cost and risk. The pressures for internet entrepreneurs and new-media professionals if these sites went dark in the long term would be difficult to overcome.
On the flip side, geographical restrictions preventing US businesses from utilising these services would be a gift to the Electronic Frontier Foundation and other groups championing a free and open internet. Finally there would be concrete proof that draconian laws coupled with rigorous and disproportionate enforcement actively harmed legitimate American businesses and gave 'foreigners' a competitive advantage, a veritable silver bullet to bring to Congress when debating new laws.
Arstechnica has an excellent article analysing the ongoing MegaUpload story as it pertains to SOPA here; TorrentFreak is another excellent source for news on this topic.