File-sharing website Megaupload is the most high-profile target yet of a US campaign which has seen the seizure of hundreds of sites accused of offering pirated music or movies or counterfeit goods.
The US authorities have seized more than 350 website domain names since launching an anti-online piracy campaign dubbed "Operation In Our Sites" more than 18 months ago.
A US Immigration and Customs Enforcement (ICE) agency spokesman said Friday the shutdown of Megaupload was an operation led by the Federal Bureau of Investigation (FBI) and not formally part of "Operation In Our Sites."
But the ICE spokesman said it was in line with the campaign against online piracy which began in June 2010 with the closure of 10 sites offering pirated movies, some within hours of their release in theaters.
A founder of NinjaVideo.net, one of the websites snared in the first phase of "Operation In Our Sites," was sentenced to 14 months in prison Friday for allowing illegal downloads of copyright-protected movies and TV programs.
Matthew David Howard Smith, 24, of North Carolina, was one of four people facing prison terms in connection with NinjaVideo.net, which reaped $500,000 during its two-and-a-half years of operation, according to US officials.
Megaupload, however, operated on a different scale entirely, according to the US Justice Department and FBI, generating more than $175 million in criminal proceeds and causing more than $500 million in harm to copyright owners.
"Operation In Our Sites" has targeted websites offering not only pirated movies like NinjaVideo.net but also music, software, clothes, electronics, games and counterfeit pharmaceuticals.
In the largest single seizure to date, in November 2011, the US authorities closed down 150 sites found to be selling counterfeit merchandise.
A November 2010 operation targeted 82 websites selling mostly Chinese-made counterfeit goods, including golf clubs, Walt Disney movies, handbags, scarves, shoes, sunglasses and other items.
Among the sites whose domain names have been seized are cheapscarfshop.com, Burberryoutletshop.com, louisvuitton-bags-forcheap.com, dvdcollectionsale.com, handbagcom.com and mydreamwatches.com.
A visitor to the sites is met with a message reading: "This site has been seized by ICE -- Homeland Security Investigations, pursuant to a seizure warrant issued by a United States District Court."
It informs visitors that copyright infringement is a federal crime carrying a penalty of five years in prison and a $250,000 fine, while trafficking in counterfeit goods carries a 10-year sentence and a $2 million fine.
According to US officials, of the 350 domain names seized since June 2010, 116 have been forfeited to the US government following a legal process which allows for the owner of a seized domain to petition the move in federal court.
If no petition is forthcoming, the domain becomes US government property.
As part of their investigation, US agents purchase goods from the sites to determine whether they are counterfeit and obtain seizure orders for the domain names from US magistrate judges, according to US officials.
Corynne McSherry, intellectual property director at the Electronic Frontier Foundation (EFF), said "Operation In Our Sites" and the Megaupload.com shutdown raise free speech and other issues.
"What about the users?" McSherry asked. "I don't think there was any question that there was at least some, perhaps a lot, I don't know, of perfectly lawful content on the Megaupload site.
"And if I'm your average user and I just lost my vacation photos I'd be pretty upset," McSherry said.
"I have lot of concerns about the US government seizing sites in general but one of them is the collateral damage for regular folks who are just trying to back up their CD collection," the lawyer for the San Francisco-based EFF said.
"It seems to me that whether or not there was due process for Megaupload or not, there certainly wasn't due process for all of Megaupload's users," she said.
McSherry also welcomed a decision Friday by leaders of the US Congress, in the face of online protests, to put on hold legislation that would have given increased powers to US law enforcement to combat online piracy.
"I hope that Congress is really going to take note, not just postponing but hopefully killing these bills," she said.
Leaders of the Senate and the House of Representatives said Friday they would delay consideration of the bills which Google, Wikipedia and other Web giants have denounced as a threat to Internet freedom.
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