Exclusive: MegaUpload Issues Response to RIAA Over Mastercard Cutoff

Yesterday, we reported on the RIAAs efforts to get Mastercard to cut off payments to MegaUpload. Today, we have received an exclusive response from MegaUpload on this news.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

Blocking so-called “rogue websites” isn’t necessarily in the law books in the US yet, but things are heating up between the RIAA, MPAA and several websites they accuse of facilitating copyright infringement. Some of these sites, it turns out, are cyberlockers – websites that host large files for their users and allows for many to download those files as a side bonus of saving some companies bandwidth costs. Some note the recent strategy of pressuring payment methods to cut off funding from websites they accuse of duping consumers into paying for pirated content as a more recent change in strategy in the organizations strategy to fight piracy.

At issue specifically is the effort by the RIAA to get Mastercard to block payments to MegaUpload.

“MasterCard in particular deserves credit for its proactive approach to addressing rogue Web sites that dupe consumers,” Mitch Glazier, vice president of government and industry relations of the RIAA said. “They have reached out to us and others in the entertainment community to forge what we think will be a productive and effective partnership.”

It’s quite a statement that sparked an even more interesting statement from MegaUpload, one of the sites explicitly mentioned among these “rogue websites”

“Are payment processors trying to become the legislature of the new decade?” Bonnie Lam of MegaUpload Headquarters asks, “Will it be them, rather than elected governments, who decide what’s right and what’s wrong? Will ballots be replaced by wallets, will people cast their votes by choosing a conservative or a liberal credit card? First WikiLeaks, then cyberlockers – what’s next, and where will it end? Will you no longer be able to settle your ISP bill by MasterCard, as your carrier of choice may profit from copyright infringement?”

“We are watching the unfolding events with interest,” Lam told ZeroPaid, “but as the vast majority of our revenue is coming from advertising, the effect on our business would be limited.”

Ouch. Not quite the effect the RIAA or MPAA might have hoped with their recent actions.

Lam continued to defend MegaUpload, “Megaupload is a legitimate business operating within the boundaries of the law. In five years of operation we have not been sued by a single content owner. If the RIAA or MPAA would have legal grounds they would have taken us to court by now. We suggest that they attack us within the legal system and stop labeling us until they have something to show.”

It is true that the RIAA and MPAA have yet to try to litigate the company. It would indeed be hard with a copyright complaints system in place in that website where if a copyright holder sees their infringing material on MegaUpload, they can have the link taken down.

“Mega has over 100 million registered users,” Lam continued, “over 45 million daily unique visitors, employees of over 70% of the worlds fortune 500 companies have accounts with us.
We host over a billion legitimate files. Documents, backups, photos, everything. If Mastercard turns against Megaupload they will have a problem, not us.”

Indeed, it’s hard to see anyone who would lose out in all of this other than Mastercard.

One things for sure, things could get quite interesting in the weeks ahead between Mastercard, MegaUpload and the RIAA should these tensions keep rising.

We would like to thank Bonnie Lam for taking the time to respond on this issue.

Drew Wilson on Twitter: @icecube85 and Google+.

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