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File sharing is the practice of distributing or providing access to digitally stored information, such as computer programs, multimedia (audio, images and video), documents, or electronic books. It may be implemented through a variety of ways. Common methods of storage, transmission and dispersion include manual sharing utilizing removable media, centralized servers on computer networks, World Wide Web-based hyperlinked documents, and the use of distributed peer-to-peer networking.

Types of file sharing[link]

Peer-to-peer file sharing[link]

Users can use software that connects in to a peer-to-peer network to search for shared files on the computers of other users (i.e. peers) connected to the network. Files of interest can then be downloaded directly from other users on the network. Typically, large files are broken down into smaller chunks, which may be obtained from multiple peers and then reassembled by the downloader. This is done while the peer is simultaneously uploading the chunks it already has to other peers.

History[link]

Files were first exchanged on removable media.^{[citation needed]} Computers were able to access remote files using filesystem mounting, bulletin board systems (1978), Usenet (1979), and FTP servers (1985). Internet Relay Chat (1988) and Hotline (1997) enabled users to communicate remotely through chat and to exchange files. The mp3 encoding, which was standardized in 1991 and which substantially reduced the size of audio files, grew to widespread use in the late 1990s. In 1998, MP3.com and Audiogalaxy were established, the Digital Millennium Copyright Act was unanimously passed, and the first mp3 player devices were launched. MP3.com offered music by unsigned artists, and grew to serve 4 million audio downloads daily.^{[citation needed]}

In June 1999, Napster was released as a centralized unstructured peer-to-peer system,^[1] requiring a central server for indexing and peer discovery. It is generally credited as being the first peer-to-peer file sharing system.

Gnutella, eDonkey2000, and Freenet were released in 2000, as MP3.com and Napster were facing litigation. Gnutella, released in March, was the first decentralized file sharing network. In the gnutella network, all connecting software was considered equal, and therefore the network had no central point of failure. In July, Freenet was released and became the first anonymity network. In September the eDonkey2000 client and server software was released.

In 2001, Kazaa and Poisoned for the Mac was released. Its FastTrack network was distributed, though unlike gnutella, it assigned more traffic to 'supernodes' to increase routing efficiency. The network was proprietary and encrypted, and the Kazaa team made substantial efforts to keep other clients such as Morpheus off of the FastTrack network.

In July 2001, Napster was sued by several recording companies and lost in A&M Records, Inc. v. Napster, Inc..^[2] In the case of Napster, it has been ruled that an online service provider could not use the "transitory network transmission" safe harbor in the DMCA if they had control of the network with a server.^[3]

Shortly after loss in court Napster has been shut down to comply with court order. This drove users to other P2P applications and file sharing continued its growth.^[4] The Audiogalaxy Satellite client grew in popularity, and the LimeWire client and BitTorrent protocol were released. Until its decline in 2004, Kazaa was the most popular file sharing program despite bundled malware and legal battles in the Netherlands, Australia, and the United States. In 2002, a Tokyo district court ruling shut down File Rogue, and the Recording Industry Association of America (RIAA) filed a lawsuit that effectively shut down Audiogalaxy.

Demonstrators protesting The Pirate Bay raid, 2006.

From 2002 through 2003, a number of BitTorrent services were established, including Suprnova.org, isoHunt, TorrentSpy, and The Pirate Bay. In 2002, the RIAA was filing lawsuits against Kazaa users. As a result of such lawsuits, many universities added file sharing regulations in their school administrative codes (though some students managed to circumvent them during after school hours). With the shutdown of eDonkey in 2005, eMule became the dominant client of the eDonkey network. In 2006, police raids took down the Razorback2 eDonkey server and temporarily took down The Pirate Bay.

In 2009, the Pirate Bay trial ended in a guilty verdict for the primary founders of the tracker. The decision was appealed, leading to a second guilty verdict in November 2010. In October 2010, Limewire was forced to shut down following a court order in Arista Records LLC v. Lime Group LLC but the gnutella network remains active through open source clients like Frostwire and gtk-gnutella. Furthermore, multi-protocol file sharing software such as MLDonkey and Shareaza adapted in order to support all the major file sharing protocols, so users no longer had to install and configure multiple file sharing programs.

On 19 January 2012, the United States Department of Justice shut down the popular domain of Megaupload (established 2005). The file sharing site has claimed to have over 50,000,000 people a day.^[5] Kim Dotcom (formerly Kim Schmitz) was arrested in New Zealand and is awaiting extradition.^[6] The case involving the downfall of the world's largest and most popular file sharing site was not well received, with hacker group Anonymous bringing down several sites associated with the take-down.^[5] In the days following this, other file sharing sites began to cease services; Filesonic blocked public downloads on January 22, with Fileserve following suit on January 23.

Legality of file sharing[link]

The legal debate surrounding file sharing has caused many lawsuits. In the United States, some of these lawsuits have even reached the Supreme Court in MGM v. Grokster. In that particular lawsuit, the Supreme Court has ruled that the creators of P2P networks can be held responsible if the intent of their program is clearly to infringe on copyright laws.

On the other hand, file sharing is not necessarily illegal, even if the works being shared are covered by copyright. For example, some artists may choose to support freeware, shareware, open source, or anti-copyright, and advocate the use of file sharing as a free promotional tool. Nearly all freeware, and open source software may be shared, under the rules specified in the license for that specific piece of software. Content in the public domain can also be freely shared.

Ethics of file sharing[link]

In 2004 there were an estimated 70 million people participating in online file sharing.^[7] According to a CBS News poll in 2009, 58% of Americans who follow the file sharing issue, considered it acceptable "if a person owns the music CD and shares it with a limited number of friends and acquaintances"; with 18 to 29 year olds this percentage reached as much as 70%.^[8]

Effects of file sharing[link]

According to David Glenn, writing in The Chronicle of Higher Education, "A majority of economic studies have concluded that file sharing hurts sales".^[9] A literature review by Professor Peter Tschmuck found 22 independent studies on the effects of music file sharing. "Of these 22 studies, 14 – roughly two-thirds – conclude that unauthorized downloads have a 'negative or even highly negative impact' on recorded music sales. Three of the studies found no significant impact while the remaining five found a positive impact."^[10][11][12]

A study by economists Felix Oberholzer-Gee and Koleman Strumpf in 2004 concluded that music file sharing's effect on sales was "statistically indistinguishable from zero".^[13][14] This research was disputed by other economists, most notably Stan Liebowitz, who said Oberholzer-Gee and Strumpf had made multiple assumptions about the music industry "that are just not correct."^[13][15][16] In June 2010, Billboard reported that Oberholzer-Gee and Strumpf had "changed their minds", now finding "no more than 20% of the recent decline in sales is due to sharing".^[17] However, citing Nielsen SoundScan as their source, the co-authors maintained that illegal downloading had not deterred people from being original. "In many creative industries, monetary incentives play a reduced role in motivating authors to remain creative. Data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers. Since the advent of file sharing, the production of music, books, and movies has increased sharply."^[18] Glenn Peoples of Billboard disputed the underlying data, saying "SoundScan's number for new releases in any given year represents new commercial titles, not necessarily new creative works."^[19] The RIAA likewise responded that "new releases" and "new creative works" are two separate things. "[T]his figure includes re-releases, new compilations of existing songs, and new digital-only versions of catalog albums. SoundScan has also steadily increased the number of retailers (especially non-traditional retailers) in their sample over the years, better capturing the number of new releases brought to market. What Oberholzer and Strumpf found was better ability to track new album releases, not greater incentive to create them."^[20]

A 2006 study prepared by Birgitte Andersen and Marion Frenz, published by Industry Canada, was "unable to discover any direct relationship between P2P file-sharing and CD purchases in Canada".^[21] The results of this survey were similarly criticized by academics and a subsequent revaluation of the same data by Dr. George R. Barker of the Australian National University reached the opposite conclusion.^[22] "In total, 75% of P2P downloaders responded that if P2P were not available they would have purchased either through paid sites only (9%), CDs only (17%) or through CDs and pay sites (49%). Only 25% of people say they would not have bought the music if it were not available on P2P for free. This clearly suggests P2P network availability is reducing music demand of 75% of music downloaders which is quite contrary to Andersen and Frenz's much published claim."^[23]

Market dominance[link]

A paper in journal Management Science found that file sharing decreased the chance of survival for low ranked albums on music charts and increased exposure to albums that were ranked high on the music charts, allowing popular and well known artists to remain on the music charts more often. This had a negative impact for new and less known artists while promoting the work of already popular artists and celebrities.^[24]

A more recent study that examined pre-release file sharing of music albums, using BitTorrent software, also discovered positive impacts for "established and popular artists but not newer and smaller artists." According to Robert G. Hammond of North Carolina State University, an album that leaked one month early would see a modest increase in sales. "This increase in sales is small relative to other factors that have been found to affect album sales."

"File-sharing proponents commonly argue that file sharing democratizes music consumption by 'leveling the playing field' for new/small artists relative to established/popular artists, by allowing artists to have their work heard by a wider audience, lessening the advantage held by established/popular artists in terms of promotional and other support. My results suggest that the opposite is happening, which is consistent with evidence on file-sharing behavior."^[25]

Billboard cautioned that this research looked only at the pre-release period and not continuous file sharing following a release date. "The problem in believing piracy helps sales is deciding where to draw the line between legal and illegal. ... Implicit in the study is the fact that both buyers and sellers are required in order for pre-release file sharing to have a positive impact on album sales. Without iTunes, Amazon and Best Buy, file-sharers would be just file sharers rather than purchasers. If you carry out the 'file sharing should be legal' argument to its logical conclusion, today's retailers will be tomorrow's file-sharing services that integrate with their respective cloud storage services."^[26]

Availability[link]

Many argue that file-sharing has forced the owners of entertainment content to make it more widely available legally through fee or advertising on demand on the internet, rather than remain static with TV, radio, DVD's, CD's, and the theater. Content for purchase has been higher than illegal in North America aggregate internet traffic since at least 2009. ^[27]As content becomes more available for pay streaming and legal action continues against illegal file sharing, illegal file sharing will likely decline further. ^[28]

See also[link]

Internet portal

• Graduated response
• Comparison of file sharing applications
• Open Music Model
• Privacy in file sharing networks
• Torrent poisoning
• Trade group efforts against file sharing
• Warez
• Missionary Church of Kopimism

References[link]

Further reading[link]

• Levine, Robert. Free Ride: How the Internet Is Destroying the Culture Business and How the Culture Business Can Fight Back, Bodley Head, February 2011.
• Ghosemajumder, Shuman. Advanced Peer-Based Technology Business Models. MIT Sloan School of Management, 2002
• Silverthorne, Sean. Music Downloads: Pirates- or Customers?. Harvard Business School Working Knowledge, 2004.
• Ralf Steinmetz, Klaus Wehrle (Eds). Peer-to-Peer Systems and Applications. ISBN 3-540-29192-X, Lecture Notes in Computer Science, Volume 3485, September 2005
• Stephanos Androutsellis-Theotokis and Diomidis Spinellis. A survey of peer-to-peer content distribution technologies. ACM Computing Surveys, 36(4):335–371, December 2004. doi:10.1145/1041680.1041681.
• Stefan Saroiu, P. Krishna Gummadi, and Steven D. Gribble. A Measurement Study of Peer-to-Peer File Sharing Systems. Technical Report # UW-CSE-01-06-02. Department of Computer Science & Engineering. University of Washington. Seattle, WA, USA.
• Selected Papers — A collection of academic papers.

External links[link]

• Digital Britain

Kim Dotcom
Kim Dotcom in 1996
Born	Kim Schmitz (1974-01-21) January 21, 1974 (age 38) Kiel, Germany
Residence	New Zealand; Hong Kong
Nationality	German
Other names	Kimble, Kim Tim Jim Vestor
Citizenship	Germany, Finland
Education	secondary modern school / junior high school[1]
Occupation	CIO CEO (2005–2011)
Years active	2005–2012
Organization	Megaupload Ltd.
Known for	Founder of Megaupload.com and sister websites
Home town	Kiel, Germany
Height	6 feet 6 inches (1.98 m)
Weight	285 pounds (129 kg)[2]
Criminal charge	Computer fraud; insider trading; embezzlement; possession of stolen goods; abuse of titles
Criminal penalty	Multiple suspended detentions
Criminal status	Convicted, probation served
Spouse	Mona
Children	5[3][4][5]

Kim Dotcom, born Kim Schmitz^[6] on January 21, 1974,^[7] also known as Kimble^[8] and Kim Tim Jim Vestor,^[9] is a German-Finnish^[10] businessman who rose to prominence during the dot-com bubble and was convicted of insider trading and embezzlement in its aftermath.^[11] He is also known as the founder of Megaupload and its associated websites.^[11][12][13] He legally changed his surname to Dotcom circa 2005.^[14] On January 20, 2012, the New Zealand Police placed him in custody under the charges of criminal copyright infringement in relation to his Megaupload Web site.

Early career[link]

As a teenager, Dotcom became known in his native Germany for claims to have cracked corporate PBX systems in the United States, and tried to parlay it into a career in data security.^[15] That effort led to his arrest on charges of using and selling stolen calling card numbers.^[16][17] In 1994, Dotcom founded a computer security company called DataProtect.^[18] In 1999, DataProtect and IVM engineering presented the "Megacar", a Brabus-tuned Mercedes-Benz S-Class W220 which, among other features, had a Windows NT server, a 17.3" SGI flat panel display and combined 16 GSM modules to provide mobile broadband Internet access.^[19]

In 1998, Dotcom was convicted of computer fraud and handling stolen goods, and sentenced to two years of prison on probation.^[20] According to a report by News & Record, he had traded stolen calling card numbers he bought from hackers in the United States.^[21] He achieved early notoriety by being the subject of an advanced-for-its-time flash animation video called Kimble Special Agent.^[22] The name is a reference to Richard Kimble, the main character of the television series The Fugitive.^[23]

Dotcom later sold 80% of the shares of DataProtect to TÜV Rheinland in 2000, during the dot-com bubble. The former went bankrupt at the time of the subsequent market crash in 2001.^[24][25]

He is known for his large frame, as he is 2 metres (6.6 ft) tall and weighs more than 130 kilograms (290 lb).^[26]

Insider trading and embezzlement[link]

In 2001, Dotcom purchased €375,000 worth of shares of the nearly bankrupt company LetsBuyIt.com and subsequently announced his intention to invest €50 million in the company.^[27] Unknown to others, Dotcom did not have the funds available to invest, although the announcement caused the share value of LetsBuyIt.com to jump by nearly 300%.^[28] Dotcom sold his shares a few days later for €1.568 million.^[27]

Dotcom had also arranged and obtained an unsecured loan of €280,000 from Monkey AG, a company for which Dotcom had served as Chairman of the Board. The funds were to be paid to Kimvestor AG. As a result, both Monkey and Kimvestor went bankrupt. Dotcom expressed remorse, stating that he had been "dazzled" and had not recognized that he would be unable to repay the loans.^[29]

In January 2002, Dotcom was arrested in Bangkok, Thailand, deported to Germany, and subsequently sentenced to a probationary sentence of one year and eight months, and a €100,000 fine, the largest insider-trading case in Germany at the time.^[30] Dotcom also pleaded guilty to embezzlement in November 2003 and received a two-year probation sentence.^[31]

Megaupload and related companies[link]

Megaupload.com

Megaupload Limited businesses[link]

On March 21, 2005, Dotcom founded Megaupload Limited, a Hong Kong-based file hosting and sharing business that eventually became the 13th most popular site on the internet^[32] with over 150 employees, US$175 million revenues,^[33] 50 million visitors daily,^[32] and estimated to be responsible at its peak for 4% of all internet traffic.^[32][34]

The Megaupload business' domain names were seized and the sites shut down by the U.S. Justice Department on January 19, 2012, following their indictment and arrests of the owners for allegedly operating as an organization dedicated to copyright infringement.^[35]

Civil litigation and controversies[link]

He was sued for copyright infringement as owner of Megaupload.^[36] A settlement was later filed.^[37]

In December 2011, Dotcom's Megaworld (owner of Megaupload, Megavideo, Megalive and more) released its "Megaupload Song" promotional music video, which featured Kanye West, will.i.am, Jamie Foxx, Sean "Diddy" Combs, Alicia Keys, Chris Brown and more lauding the service. Universal Music Group (UMG) responded by using the DMCA takedown process to have the clip removed from YouTube and other sites. Dotcom accused UMG of sending "illegitimate takedown notices", since UMG did not own the song in question, and Megaupload went on to file a lawsuit against UMG.^[13][38][39] A statement released by UMG claimed that a special arrangement exists between UMG and YouTube which allows UMG to take down any videos featuring their artists, regardless of copyright status.^[40] This claim was later explicitly denied by YouTube,^[41] which has since reinstated the video.^[42]

2012 arrest in New Zealand and seizure of Megaupload's websites[link]

On January 5, 2012,^[43] indictments were filed in the United States against Dotcom on criminal copyright infringement charges along with Július Benčko and 5 other associates. On January 20, 2012, Kim Dotcom, Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in Coatesville, Auckland, New Zealand, by New Zealand Police, following an armed raid on Dotcom's house. New Zealand authorities were cooperating with the United States' FBI and Justice Department, Hong Kong Customs and the Hong Kong Department of Justice, the Netherlands Police Agency and the Public Prosecutor's Office for Serious Fraud and Environmental Crime in Rotterdam, London's Metropolitan Police Service, Germany’s Bundeskriminalamt and the German Public Prosecutors, the Royal Canadian Mounted Police and the Canadian Department of Justice in the investigation preceding the arrests.^[44][45]

According to Dotcom's defense, the police operation against Megaupload was unnecessarily grandiose: "... armed officers arrived in helicopters and dropped into the Dotcom mansion courtyard."^[46]

On January 25, 2012 (NZ local time) Dotcom was initially refused bail due to alleged risks of fleeing to Germany,^[47][48] but was granted bail on February 22.^[49]

On February 6, Dotcom invited New Zealand journalist John Campbell of Campbell Live to visit his Coatesville property and inspect the damage done by police. According to head of security, Wayne Tempero "... the force was incredible ... Had they simply asked us we would have opened the door to any room they wanted to enter." He said Mr. Dotcom seemed shocked by the police action. "I remember him saying "copyright infringement" and shook his head, like he's going "what the hell?". We weren't building bombs in the cellar, we didn't have a meth lab bigger than the South Island here. This was a normal family house.".^[50]

On February 22, Kim Dotcom was released on bail under the condition that he remain within 80 km of his Coatesville residence and is barred from Internet access. Bail was granted after considering his flight risk and seizure of assets. Judge Dawson stated Dotcom has “every reason to stay to be with his family and fight to keep his assets.” The condition of bail came with a successful additional measure brought by the US Government to prevent Kim Dotcom's access to the Internet. Despite concerns about the interaction between Kim Dotcom and his legal team, Judge Dawson sided with the US government because Kim Dotcom "(has) the ability to use it for wrong purposes."^[51]

On March 1, Kim Dotcom gave his first interview to New Zealand media after his arrest to John Campbell of Campbell Live.^[52] He explained the close ties of his case to that of Viacom vs. YouTube; in which the Digital Millennium Copyright Act (DMCA) shielded YouTube from the infringement of its users and described his surprise when he was arrested without trial or a hearing.^[53] Kim Dotcom also provided some of the aspects of his defense. Dotcom explains that the Megaupload was responsible for 800 files being transferred every second and that it would be impossible to police all that traffic. In addition, the US has privacy laws, such as Electronic Communication Privacy Act, which prohibits the administrators from looking into the accounts of the users.

On March 4, he released his diary detailing his first week since being out of prison and expressed his concerns that wife, Mona Dotcom, may be targeted by the US Authorities.^[54]

Other activities[link]

Dotcom has taken part in the Gumball 3000 international road rally on several occasions, winning in 2001 in his Mercedes Brabus SV12 Megacar. He also competed in 2004. In a 2004 interview on Belgian Television, he claimed that in Morocco a car was blocking him and "he had to bump him off the road. Nothing happened to him". He claims he subsequently found out it was the Chief of Police in a "civil" car.^[55]

Before his arrest, Dotcom was the world's number one-ranked Modern Warfare 3 player. The game has more than 15 million online players.^[56] On January 23, 2012 he lost the position and dropped to number two.^[57]

Since 2001, Dotcom has received media coverage as a founder of a Hong Kong based investing company called Trendax. The company claimed to use artificial intelligence to maximize investment return and Dotcom tried to find investors for a hedge fund managed by the company.^[58] According to media reports Dotcom never had a proper license to start the fund, though no fraud was suspected.^[59]

In 2010, Dotcom leased a NZ$30M mansion at Coatesville, near Auckland, owned by Richard and Ruth Bradley, the British founders of Chrisco, and considered the most expensive house in the country. He had an arrangement to buy the mansion when the lease expired,^[60] but the New Zealand Government declined his application to buy the land on the basis that he did not meet the "good character" test.^[61] Dotcom was granted permanent residency in New Zealand in 2010.^[12][62]

An investigative piece found Dotcom in Hong Kong business records with the new name "Kim Tim Jim Vestor", allegedly bearing a Finnish passport, and acting as director of several "Mega-" companies, among them Megaupload Ltd. and Megarotic Ltd.^[11] According to Megaupload spokesperson B. Lam, Kim is one of many shareholders at Mega and not involved in most day-to-day business decisions.^[11]

Kim Dotcom has spoken out against his negative portrayal in the media, claiming to be a reformed character and a legitimate businessman who has been unfairly demonized by United States authorities and industry trade groups such as the RIAA and MPAA. He contends that the services offered by his Megaupload site were not significantly different from those of comparable services such as Rapidshare or YouTube, and he has just been used as a scapegoat because of his hacker past. Dotcom is also keen to point out his charitable works, including funding the fireworks display for New Year 2011 in Auckland,^[63] and donating large amounts of money to the relief fund following the devastating 2011 Christchurch earthquakes, and explains that his property purchases in New Zealand were approved by several other government Ministers before being vetoed at the last minute by Justice Minister Simon Power, after the United States Department of Justice secretly asked his department for help with their investigation of Dotcom.^[64][65]

References[link]

External links[link]

• The Register: Bin Laden hack-meister in defacement, financial debacles
• The Register: YIHAT founder Kimble/Schmitz arrested
• The Register: Kimble arrested for insider trading
• The Register: Hoaxster hacker discovers infinite-wealth algorithm
• Inside Megaupload's Megamind: Kim Dotcom's Playboy Bunnies, Russian Nuclear
• 3 News: Following the latest on Kim Dotcom / Schmitz
• TV3 On Demand: Kim Dotcom / Schmitz first exclusive TV interview after his arrest in New Zealand