Just a day after the SOPA/PIPA blackout demonstrations occurred, the Department of Justice made its move to shut down the online file storage provider megaupload.com. According to the DOJ:
Seven individuals and two corporations have been charged in the United States with running an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com and other related sites, generating more than $175 million in criminal proceeds and causing more than half a billion dollars in harm to copyright owners.
There's no doubt that piracy was rampant on Megaupload. Sam Biddle over at Gizmodo believes the feds narrowed their focus on Megaupload because its owners ran around "like sloppy drug kingpins". But despite the illegal file sharing going on, there was also a great deal of legitimate file storage and sharing that ended up becoming causalities of the shutdown.
Additionally, it would seem that the DOJ and FBI aren't finished yet. There are other file-sharing sites very similar to Megaupload, including Rapidshare, YouSendIt, DropBox, and even Apple's new iCloud. Users of all these cloud storage and sharing services can easily transfer copywritten material across them. So even though these services may be operated in a more professional way, they can all facilitate criminal copyright infringement.
Ladies and gentlemen, this is where cloud computing gets scary. By outsourcing your infrastructure, storage, or applications, you are relying heavily on an external entity. A huge amount of trust is placed in a third party to keep your applications and data safe and accessible. Can you really trust someone else that much? Do you know who all of Amazon EC2's customers are? And if one or more companies are found to be engaging in illegal activity on the EC2 network, who's to say the DOJ won't simply shut the entire network down?
I may be exaggerating a bit by saying the DOJ would shut down all of EC2. But it underscores the point that contingency plans should be developed in the event of a catastrophic failure in the cloud. We can no longer assume that temporary outages are the major concern of cloud computing. Instead, we need to start thinking about the time when the cloud completely goes offline -- for good. What's your contingency plan for that?
Most if not, all companies do back up their data regularly as a part of their Disaster Recovery Plan (DRP). Cloud storage is a new frontier for data backups and disaster recovery. After all, storing data in cloud storage is relatively safer than having storing data backups at a physical location. However, as this is a new technology, companies usually use it in parallel to their physical backup sites hence, it is in essence, a backup on top of the current backup being employed -- allowing more options in times of disasters. I've worked with several companies and gone over several of their DRMs and all of them have at least one physical site to store their backup data in addition to employing cloud computing/data storage. The advantages of having cloud storage however, is quite apparent when there is a need to access the data from different places in the world. Cloud storage is also a lot cheaper to employ than having a physical data storage site. The Megaupload incident however, raises a lot of questions for global companies that use cloud computing services. -- The laws and policies of one country is able to shut down a service employed by legitimate business because of a few bad apples that use the site for piracy. Sites can always find ways to filter out legitimate data from illegal files but there will never be a fool-proof way to do it. Fools will always find ways to circumvent these filters. Allowing the Feds the power to shut down a service or an entire site because of it will make companies hesitate to use cloud computing services. The big question would now be: Now that it is possible for a single government/country to force a cloud computing site/company to shut down, is using cloud computing still a feasible option for companies?
Interesting read and thanks for posting an update. Some people assume that once they get some backup storage, regardless of how it's done (ie. outsourced), that things are fine and they can go about without a backup for their backup plan. That's where those people are wrong. I don't think corporations necessarily use services like Megaupload for extra storage. However, as you've said, they can be employing services that are also being used by people who are doing illegal stuff.
I think this is an interesting challenge posed for those behind these cloud services: how are they going to cut down the illegal activity (or eliminate it completely) so they won't run the risk of being shut down entirely?
@ Sara, I agree that this is less likely to happen with a service from a bigger more legitimate company like Amazon but I wouldn't rule it out completely. Google recently paid some big fines for running ads for illegal pharmacies. The federal government setup the sting so it's pretty clear that they are keeping an eye on the big players, but if a company feels like they are being unfairly targeted and wanted to fight back, even though legal channels, I think the possibility of them being shut down becomes more likely.
Here's a Washington Post article that discusses that legit user data may be completely deleted on Feb 2. There is some hope in people being able to retrieve their personal data but it's still up in the air. This will be really interesting to follow and may be critical to the future growth of public cloud services.
@Sara, I agree with your thoughts regarding a decline in market competition for cloud computing due to the fact that there will be little trust in small and medium-sized providers. It looks like we might be stuck with a couple of big cloud providers to choose from. Sort of like the phone company -- so be prepared for a severe degradation of customer service!
@Curt- You are probably right. Except I think what Andrew says about Megaupload being attractive to the Feds because they lived like pimps is part of the deal. Amazon's guys wear suits (or whatever) and drive sensible cars. I suspect 90% of defense to the feds coming knocking on your door is acting the part of a legit organization. And that is a sad reality.
@Dave, if the Feds use the same sort of logic that's been used with property owners where illegal drugs have been used or sold, the terms of service won't make a whit of difference. Ultimately, that's the problem: No one really knows what the standards of evidence and action are, though it's obvious that bills like SOPA and PIPA would have dramatically increased the actions that could have been taken regardless of the service owner's knowledge of the activity taking place within the service.
When we look at other federal legislation, history shows that any right to action will be stretched to its legal limits and beyond by prosecutors and LEOs anxious to stop allegedly criminal activity. Saying, "It couldn't happen that way," is not good prognostication strategy!
It seems like a huge percentage of this has to do with terms of service, right? If you'r a cloud provider who says, "don't use our service to do illegal stuff" don't you have at least a little cover when the Feds come knocking?
Hey, we didn't know they were doing this. That's not what we exist for. Go get them, not us.
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