Did the Feds Just Kill the Cloud Storage Model?

Megaupload Type Shutdowns and Patriot Act Are Killing Cloud Storage

The government’s takedown of the 800 pound gorilla online storage site Megaupload may have killed the cloud storage model.

Many innocent users have had their data taken away from them.

As PC World notes:

The MegaUpload seizure shows how personal files hosted on remote servers operated by a third party can easily be caught up in a government raid targeted at digital pirates.


Before its closure MegaUpload had 180 million registered users and an average of 50 million daily visits, claimed a total visitor history of more than one billion, and accounted for about four percent of all global Internet traffic….


Take, for example, Videobb.com, a site that appears to be similar to Megavideo. Videobb bills itself as an ideal place to share videos without ever having to worry about “disk space or bandwidth again.” Videobb is “safe, secure and easy” the company says, and that’s probably true; at least unless the FBI and the Department of Justice decide that videobb is ripe for a takedown. Behind the scenes, videobb is rife with pirated content just as Megavideo was.

A quick check of sites that index pirated content shows you can find recent episodes of The Big Bang Theory, Modern Family, and the recent movie Contagion available for free streaming on Videobb.

Videobb isn’t alone, either; services such as Novamov, ZShare, and VidXDen all offer file-sharing services similar to Megavideo and all of them are being used (or at least have been used) to distribute pirated content. The trick is that you won’t see the pirated content on these sites’ front pages; you have to know how to access it through third-party sites that contain links to the secret files.

If you use any of these sites to store or distribute your own non-infringing files, you are wise to have backups elsewhere, because they may be next on the DOJ’s copyright hit list.


Keep in mind that when you use these services you also make it easier for the government, and possibly hackers, to peer into your files without your knowledge — but that’s a discussion for another day.

Bottom line: if your cloud service offers file storage on the front end and shows pirated video out the back, don’t be surprised if your files vanish one day.

In other words, the government is exercising the power to seize all of the legal property held in a storage facility because a handful of crooks have illegal property in theirs.

And if that’s not enough to kill your enthusiasm for cloud storage, CIO points out:

Worries have been steadily growing among European IT leaders that the USA Patriot Act would give the U.S. government unfettered access to their data if stored on the cloud servers of American providers—so much so that Obama administration officials this week held a press conference to quell international concern over the protection of data stored on U.S. soil.


Anxiety was heightened last year when a Microsoft UK managing director admitted that he could not guarantee that data stored on the company’s servers, even those outside the U.S., would not be seized by the U.S. government.


Escaping the grasp of the Patriot Act, however, may be more difficult than the marketing suggests. “You have to fence yourself off and make sure that neither you or your cloud service provider has any operations in the United States,” explains [Alex Lakatos, a partner and cross-border litigation expert in the Washington, D.C. office of Mayer Brown], “otherwise you’re vulnerable to U.S. jurisdiction.” Few large IT customers or cloud providers fit that description in today’s global business environment. And the cloud computing model is built on the argument data can and should reside anywhere around the world, freely passing between borders.


So, what’s a European cloud customer to do—or, for that matter, a U.S. customer anxious about how their cloud provider might respond to a government request for data under the Patriot Act? Cloud and other technology service providers have a mixed record when it comes to keeping customer data out of government hands. “For the cloud service providers, their life may be easier if they give the government whatever it’s asking for,” Lakatos says.

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  • I approve of this side-effect, considering cloud computing was the much hyped “new technology” that was going to be used to make people rent media that they used to be able to buy.

  • Repost from Reverse Engineering

    Off the direct Economic front, the Big Newz of the week was first the Failure of SOPA to get the votes in CONgress needed once Google and Wiki and other internet giants came down agaisnt it, then followed by the FBI takedown of MegaUpload, a cloud computing service where people store files, many of them of course not precisely legal files or without Copyright issues.

    To me, the whole Cloud Computing idea is just Nuts to begin with. Why anyone would expect their data to remain Secure on somebody else’s Computer is crazy. Anybody who stores data ONLY on a remote computer is BEYOND crazy, yet many people including the Biz I work for does this (despite my strenuous objections to it).

    All the companies which once provided Software for your Computer to run Database programs and so forth hardly offer them anymore, what they offer instead is a SERVICE you access on the Web where you drop in all your data and a program housed on a remote computer does all the sorting and tallying of said data. About the only thing you have on your computer is the password to get into “your” account.

    The day the Net goes down? You are SOL. You can’t access any of your old data. Cloud Company goes BK? You can’t access any of your old data. You run into financial difficulties and can’t pay your Monthly Bill? You can’t access any of your old data.

    Why would ANYBODY use this methodology? The “convenience” of being able to acess it from anywhere on the Web, but moreso because you simply cannot GET the software to do similar tasks resident on your home computer anymore, unless you simply pay through the nose for an independent software developer to write it for you.

    The model of making MONEY off of software programs for your home or biz computers broke down as a result of ubiquitous Pirating of said software, which Microsoft spent a 2 decades long battle trying to put a lid on, but never succeeded, thus eventually becoming superceeded by Google and the idea of Cloud Computing.

    This latest takedown of MegaUpload though reveals the inherent weakness of cloud computing, which is that if it is not in your POSSESSION, you do not OWN it. The problem of course for many even LEGITAMATE biznesses is they cannot get hold of software anymore at reasonable prices which will operate on their OWN computers. Plus of course they are all addicted to the Web now, and doing Bizness with Birck & Mortar stores is just so Passe.

    Far as pirated Movies and Books and other “intellectual Property” are concerned, taking down MegaUpload puts a dent in it, but the Hackers of Anonymous are sure to break all copyright protection schemes and sure also to find more distributed means of storing the data on billions of hard drives scattered about the net.

    The whole bizness is abotu tieing up IDEAS as Property in much the same way Resources are tied up as Property. By centralizing the Storage, by controlling the Access, you can turn it into a Conduit for revenue production. those that want or need the service have to PAY for it. Ideas are quite a bit harder to tie up this way, though lord only knows the Illuminati have been trying to use the legal system for doing so ever since the idea of a “Patent” or “Copyright” was conjured up.

    Fortunately for all of us, the most Important Ideas are all long since in the Public Domain. However, each time we let ourselves become attached to more complex Conduits we “cannot live without”, we surrender more of our Freedom. Your Smartphone does not make you more Free, it puts you in BONDAGE to the people who make the Phones and run the Networks. Your Car does not make you more Free, it puts you in bondage to the folks who make the Cars and supply the Fuel.

    The Personal Computer DOES make you more Free, besides its ability to help you in developing your own ideas, it also makes it more possible to copy and store many dieas of others that can help you in your creative attempts at taking the Next Step. The Net and Cloud Computing are evolutions which retract that freedom.

    It is up to the Hackers of Anonymous to combat this. The Geeks have to keep working to develop distributed networks which have no central hubs. They have to keep attacking the central hubs with DDoS attacks. They have to keep compromising “secure” central databases.

    This is a numbers problem I am confident the Hackers of Anonymous will WIN. There are going to be many more Unemployed Network Engineers with an Axe to Grind than there are employed ones. Eventually here, one REALLY smart one is going to get the Axe as his job is outsourced to India, and he will let loose a Virus that will take the whole fucking Net down, Clouds and all. That is Baked in the Cake here.


  • R Foreman

    > In other words, the government is exercising the power to seize all of the legal property held in a storage facility because a handful of crooks have illegal property in theirs.

    Bah.. the government has been stealing your purchasing power and lending it back to you at interest for centuries. And guess what, they need lots of big guys with guns to protect them from the angry mobs that result. People must like being violated, because we just continue putting up with it (that or we haven’t found a way around the big guys with guns yet).

    Someone once said that a government exists at the consent of the governed, but that hasn’t been true in the USA for a very long time now. We’re governed because the bar to changing our situation is just a little too high.

  • Bill

    “Cloud Computing” is a term applied to the modern incarnation of a bunch of dumb terminals attached to an IBM System 370. Except that back in the day, you probably owned and controlled the mainframe.

    I wonder about the ‘security’ of the popular on-line backup outfits like Carbonite, now … you know they’re full of Copyright problems. When Carbonite gets shut down because someone backed up their illegal .mp3 files, will you still be able to restore YOUR computer files? Not according the the DoJ model now.

  • Jack

    To what extent do all the above cloud problems apply to Apple’s iCloud?

  • Michael Birks

    Jack – Apple’s probably in the ‘too big to attack’ category, along with the likes of Microsoft, Facebook and Google.

  • themusicgod1

    Somewhere, Richard Stallman is having a field day. This is exactly what he’s been saying would happen for years.

  • rashid

    For sure I will not be backing up my data on any websites other than , windows skydrive , i would like to see how the govt gets their work cut out by pinching the MICROSOFT(consider font size 80 pt) . by the way One can still upload Pirated stuff on thousands of other sites and then passing the links in forums, I heavily belive that megaupload did not just provided some free premium accounts to some of the higher ups. otherwise they would be cracking the Pirates Bay.

  • Zedrich

    Oh, where to begin..

    This entire fiasco is just unbelievable. Even my files are gone…

    There has to be something that CAN be done. The entire populace of people using the Internet can’t possibly be less than half of the world’s population, and yet all the efforts that have been made to make them realize the truth about this whole mess is either falling on ignorance or lack of interest, curiosity or concern…

    Anonymous should start the entire mass information campaign to stop all this. If they could find some dumbass who killed a kitten and posted a video of it online, hack Sarah Palin’s email, troll Oprah, combat Scientology toe-to-toe and spread an information campaign against them, and all the other epic things that they have done, they should be able to do this as well..

    All of you, we must do this before it is too late, and our freedoms and liberties taken away from us and substituted for something that is only a mere lame excuse for it.

  • Samantha Christian

    For the past 2 months I have been trying to research a Korean Manga author (don’t roll your eyes yet), and I discovered unpleasantness. We do not really have international access to anywhere via the computer. First Google, Chrome etc. do not allow a lot of roaming due to few tags on so much information out there. If we cannot speak every language, our search is yet smaller. Yes, even using Google translate..LOL. I could not access information to research one person in Korea that was an illustrator. My point is – The Gov claims it is chasing pirated books sharing and other types of sharing – to which is the cause of the industry to collapse – but in reality it wasn’t that strong of an industry to begin with. Tokyo pop was big – but if national book stores like Barnes n noble would sell manga and anime – then people would not be forced to use small companies that use bad customer service to put it nicely, over the internet. Tokyo pop did not have connection to every manga every written only big titles that they could get. Waiting for more than 5 years for something to be made available in the US is what was and is a major problem. Ether censor ship of material the US gov imposed, or translation of material and down right bad business from US soil companies with foreign companies, the problems are not all file sharing anymore than sharing a book we bought. Look at the gaming industry: Most players remember only getting to access games online by illegal means. Now due to competition it is offered to us because they realized all the money that they were missing – so companies got into the game to sell here. Our relationship with foreign companies by US companies is the problem. Bad business dealings and giving US a bad name. Taking away Mega-upload and live journals that promoted scanalation to books is small potatoes. Why isn’t You-tube attacked, Twitter, Facebook, and the bigger companies that are blatant about sharing. That was the scheme in the first place – to share and connect. It’s a 2 edge sword the Gov is throwing about and not just US are effected and watching.