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Megaupload's business model isn't too far off from what cloud hosting providers such as Google Drive, Box, Spideroak, Dropbox, and the others still do today. Yet they are the only ones singled out for legal attacks over their business model.
Five years ago the US Government launched a criminal case against Megaupload and several of its former employees. One of the main allegations in the indictment is that the site only deleted links to copyright-infringing material, not the actual files. Interestingly, this isn't too far off from what cloud hosting providers such as Google Drive and Dropbox still do today.
[...] One of the main arguments in the indictment is that Megaupload would only disable a URL when it received a takedown notice, not the underlying file. As a result of the deduplication technology it employed, this meant that the file could still be accessed under different URLs.
[...] The apparent 'failure' to block infringing content from being uploaded by other users isn't illegal by definition. In fact, neither Google Drive nor Dropbox does this today. So how is the Megaupload situation different?
The main difference appears to be that Megaupload only removed the links that were reported as infringing, while Dropbox and Drive also prevent others from publicly sharing links to the same file. All three services keep or kept the original files on their servers though.
(Score: 3, Informative) by Anonymous Coward on Monday February 20 2017, @11:58PM
You're not listening yet. Suppose I (user A in GP's terms) write a book, myself. I and I alone hold the copyright; I didn't license it from big media, and there's no DRM involved. I push a copy of the file to Mega for backup, and don't share the link to anyone.
Then I distribute copies of that same file to my friends, without authorizing them to share it farther. One of them, user B, uploads it to Mega and posts the link to all his pirate friends; Mega dedups that with my copy, of course.
I see this, and send Mega a DCMA takedown; am I to expect them to trash my backup copy as well?!
Yes, GP and I know this isn't a likely scenario, but it illustrates why the assumption that one infringing copy means all copies are infringing is not universally valid.