I know you know this, but for the benefit of the thread:
Megaupload is commonly understood to have been "complying with the law" based on a misapprehension of what the law actually is.
The misapprehension is that "compliance" with US copyright law means "honoring takedown notices".
The reality of US copyright law is that there are two sides to compliance: first, takedown notices need to be honored, and second, the service can't operate with foreknowledge of infringing use.
You can execute takedown notices within milliseconds of their arrival, but if an opposing lawyer or prosecutor can demonstrate that you repeatedly (a) came into knowledge that your service was used for piracy and (b) took no action, you effectively forfeit the service provider "safe harbor".
It was discovered by prosecutors that Megaupload not only knew about infringing content on their own site (trading links among staff for particular films, for instance), but also ran a promotional/affiliate program that rewarded uploaders for pushing popular copyrighted material to the site.
Megaupload is commonly understood to have been "complying with the law" based on a misapprehension of what the law actually is.
The misapprehension is that "compliance" with US copyright law means "honoring takedown notices".
The reality of US copyright law is that there are two sides to compliance: first, takedown notices need to be honored, and second, the service can't operate with foreknowledge of infringing use.
You can execute takedown notices within milliseconds of their arrival, but if an opposing lawyer or prosecutor can demonstrate that you repeatedly (a) came into knowledge that your service was used for piracy and (b) took no action, you effectively forfeit the service provider "safe harbor".
It was discovered by prosecutors that Megaupload not only knew about infringing content on their own site (trading links among staff for particular films, for instance), but also ran a promotional/affiliate program that rewarded uploaders for pushing popular copyrighted material to the site.