RapidShare "not concerned" about Megaupload takedown

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While customers of Megaupload, both legitimate and otherwise, try to figure out where to turn next, other file sharing companies are ready to step up to fill in the gaps—at least for legal uses. And RapidShare, the next largest "digital locker" service, claims to be unconcerned about the MegaUpload case's precedent. But the case could have a broad impact on companies that offer storage as part of their services, depending on the outcome.

"We're not concerned or scared about the raid," Daniel Raimer, a spokesperson for RapidShare, told Ars in a phone interview. "File hosting itself is a legitimate business."

If a manager of a bank got arrested for money laundering, he said, it wouldn't lead to the shut-down of all banks. And he said Microsoft's SkyDrive and other cloud data storage and backup services," from a technical standpoint are doing what we do."

In a statement, RapidShare's CEO Alexandra Zwingli enumerated the ways in which RapidShare is different from Megaupload, pointing out first that RapidShare is set up in a much more transparent way than the Mega empire, and under the actual names of its founders.

"RapidShare AG was founded in Switzerland and in fact, it was always located at the address given in the company details and was always run under real names without any anonymous intermediate businesses. The radical measures against Megaupload were apparently required since the situation there had been totally different."

Zwingli said RapidShare is "an absolutely legal service—like Swisscom or YouTube", with services comparable to Dropbox, and doesn't offer a rewards system like Megaupload did for frequently downloaded files. "We act rigidly against copyright infringement," Zwingli asserted, and added that the company has "established a constructive dialogue with politics and society in the United States and in other countries."

Raimer said the MegaUpload raid wasn't about file sharing itself, but the alleged criminal actions of the company's staff. "As far as I can tell, the allegations are based on their closed eyes to the pirate scene, and that they financially supported (pirates) and uploaded infringing content themselves. If they turn out to be true, then law enforcement had to go this way."

RapidShare has designated a Digital Millennium Copyright Act agent to deal with takedown requests, Raimer said.

Frank Kenney, the vice president of global strategy for Ipswitch File Transfer (a company that provides a managed file transfer service for corporate users) and former analyst at Gartner, told Ars that he believes that the Megaupload case will create issues for companies like RapidShare—and anyone else who offers online storage as part of their services. "The question will be," he said, "how on the hook are these companies because they don't look at what their customers upload or download?" He said that the impact of the Megaupload case may be further reaching than SOPA and PIPA may have been if they had been enacted.

While sites such as RapidShare and FileServe offer unlimited storage and high-speed downloads, Dropbox and other companies more focused on point-to-point file sharing and synchronization discourage using their services for piracy by charging large premium rates for bigger storage (about $200 a year for 100 gigabytes, and $795 a year for their unlimited "team" account) and by throttling the amount of bandwidth allowed for downloads of files. But Kenney said DropBox and cloud backup services like Carbonite could still find themselves forced to deal with issues over content.

Kenney also pointed out that among the alleged pirated content on Megaupload, there were likely significant amounts of corporate content being shared for legitimate reasons that is now lost or exposed by government seizure. Of course, Kenney's company is in a position to benefit from those concerns. Ipswitch's product is intended to replace services like Dropbox for corporate use, by allowing companies to host it themselves and add features like data loss prevention and other safeguards to prevent the accidental leakage of sensitive data by employees.

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