February 28, 2013
The former operator of a popular file-hosting site has been heavily fined by a court in Germany. The man, who is the former admin of Uploaded.to, was found guilty of offenses related to the unauthorized distribution of copyrighted content.
The court fined him a total of 144,000 euros ($188,000) but due to other key matters in the case the important issue of service provider liability for third party actions wasn’t tested.
If the recent and ongoing controversy involving Megaupload has taught us anything it is that hosting other people’s content has the potential to spark heavy handed legal action. But while the 2012 Mega case rolls on with no end in sight, another case has just drawn to a conclusion.
Uploaded.to was born sometime in 2006 as the one-click file-hosting market began to develop. For the time it offered a generous upload maximum of 250mb per file and by the end of 2007 was selling premium accounts and offering uploaders four euros for each uploaded file downloaded 1,000 times.
The site now exists under new ownership at Uploaded.net but the historical activities and fate of the site’s former operator following a criminal trial are now being reported.
In addition to controlling Uploaded.to, the man also operated a second linking site called DC Remix. When the original rightsholder complaint was filed in 2007, Uploaded had around 400,000 hits a day and DC Remix around 80,000 members.
Due to shared ownership and the fact that DC Remix published links to copyright works stored on Uploaded.to, this was not a simple case of the operator of a file-hosting site being held liable for the infringing actions of his users.
Rasch Legal reports that the sites were in “technical cooperation” in order to provide a system for the illegal distribution of music. DC Remix encouraged its users to upload pirated music to Uploaded.to, profited from those who subsequently bought premium accounts on the file-hoster, and generating money throughout from advertising.
During the trial the District Court in Munich found that the rewards program operated by Uploaded.to incentivized users to upload infringing material, by paying out more to those who generated the most subsequent downloads.
The court found the man, known by the name Deniz C, guilty of commercial copyright infringement and sentenced him to pay 360 day fines of 400 euros each, to a total of 144,000 euros ($188,000).
The site operator accepted his sentence in principle but is reported to have appealed the 400 euro amount, arguing he had a net income of just 7,300 euros. However, the original amount was considered reasonable following the discovery of photographs on Facebook depicting the now Swiss resident in a luxury apartment overlooking a lake, wearing an expensive watch, and alongside his Lamborghini.