Kim Dotcom’s Megaupload Sued By US Record Labels, Following Movie Studios' Lawsuit, For Copyright Infringement

Four major U.S. record labels have filed a copyright infringement lawsuit Thursday against file-sharing website Megaupload and its founder, Kim Dotcom, three days after the company was sued by Hollywood’s major movie studios and the Motion Picture Association of America, or MPAA.

The complaint, filed in the Eastern District of Virginia by the Recording Industry Association of America, or RIAA, stated that the founder, co-founder, majority shareholder and head programmer of Megaupload “engaged in, actively encouraged, and handsomely profited from massive copyright infringement of music.” The complainants are Warner Music Group, a unit of Time Warner Inc (NYSE:TWX), UMG Recordings Inc, a unit of Vivendi SA, Sony Music Entertainment, a unit of Sony Corp (NYSE:SNE), and Capitol Records, also owned by Vivendi, and all RIAA members.

"To ensure a vast and ever-growing supply of popular copyrighted content to which they could sell premium access, defendants paid users to upload popular content to Megaupload's servers," the RIAA members said, in their legal complaint, which also claimed that Megaupload generated more than $175 million in illicit profits from the copyright infringement of sound recordings “while causing more than half a billion dollars in harm to copyright owners.”

U.S. authorities had closed down the website in 2012, accusing Megaupload of costing Hollywood studios and other copyright owners more than $500 million. On Monday, movie studios including Twentieth Century Fox Film Corp, a unit of Twenty-First Century Fox Inc (NASDAQ:FOXA), Disney Enterprises Inc, a unit of The Walt Disney Company (NYSE:DIS), and Paramount Pictures, a unit of Viacom Inc (NASDAQ:VIAB), all members of the MPAA, filed a similar lawsuit in the same court.

According to Reuters, the U.S. attorney of Dotcom, who was born Kim Schmitz, reportedly said: “The RIAA, MPAA and DOJ are like three blind mice following each other in the pursuit of meritless copyright claims,” adding, "These cases are an assault on cloud storage technology, as cloud storage is a neutral technology that can be used for both good and bad purposes."