MegaUpload Bust Should Scare Affiliates

I’m not one of those conspiracy folks who will rant all day about the evils of the government, and how they are going to take away our guns, force us to worship Satan or worse, make us listen to Justin Beiber. However, when I heard that MegaUplaod was “busted” for what should have been a civil matter, there were numerous things that came to my mind about what was wrong with this. Worse, I realized that these types of arrests could easily affect the Performance and Affiliate Marketing industry.

Here are a few keypoints that bother me and give you something to think about:

1)   Foreign companies and affiliates will stop doing business with US based companies. If the US Department of Justice can go to another Country, arrest a non-US Citizen for acts not really committed in the United States, where does that end? If you are an non-US affiliate, do you want to worry about being arrested for violating some law that you never heard of?  Do you think that non-US Companies will want to do business with US-Companies if they have to worry about the same?

2)   Intellectual Property Law has now become criminal. Intellectual Property cases are usually expensive and usually have 100’s of different opinions associated with them. Whether something is a violation of someone’s copyright, the civil courts usually decide their trademark or patent. In this case, a claim by the movie and recording industry, turned what is a civil case into a federal prosecution. There are often many disagreements in IP law about what is “fair use” and what is allowed. Do you want to risk being part of a criminal case for promoting free gift-card offers, when the TM holder says the method of promotion is not legal?

3)   It requires sites to police their users.  While its always recommended to have an internet attorney, it has been a principle for a while that what users do, how they interact with other users, does not have to be policed. Now, based on this criminal prosecution, internet sites should know everything their users are doing, and spy on them.  As marketers, do we need to worry that how we promote a product will somehow be connected with an illegal activity, and we will somehow be charged with a crime? Do we need to start policing sites?

I do not promote pirating, and trademark infringement. I really dislike most of the free giveaway offers, and think often on the the scummy side. Youtube was accused of the same thing: allowing users to upload copyrighted material, and only a daily basis you can still find hundreds of thousands of copyrighted works on their site. However, they settled and started to payoff the RIAA and the MPAA, and they were never prosecuted. On the other hand, MegaUpload refused to be extorted and never paid the bounty. Is this fair, that if you don’t pay off a very influential, very powerful lobbying organization that they can use connections with the Department of Justice to push a prosecution?  Look at this advertisement from the MPAA, which frankly reeks of 1984.

Seriously, the MPAA is the same idiotic company that puts ratings on movies and tell us that titties are a bad thing, but cutting of heads are good for children.

As affiliates and performance marketers we don’t have the huge lobbyists. We have the Performance Marketing Association, which has started to take on Washington and represent us. Still, we are a long way from being able to protect ourselves against major corporate interests, many of them who hate that almost anyone can learn how to market a product, and product their own results with hard work.

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Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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  1. Does it means that mega upload is now locked, I mean block by the government because of the SOPA? This is bad cause sometimes many user still use this site in downloading files.

  2. Be careful, It looks like you illegally scanned a copyrighted newspaper or magazine ad and posted it to your website. They’re watching…

  3. No, SOPA/PIPA was shelved. Besides, they din’t need SOPA & PIPA to do this.

    Big Government has existed for so long now that they can silently pass laws and no one seems to mind.

    Ron Paul might be very radical, but I believe and agree with some things he says. The government is too big. I also believe the media companies are too greedy. They figure why change and make things better. We can sue.


  4. This has nothing to do with SOPA. In the weeks ahead, evidence will be brought forth against Mr. Kim that shows Megaupload was just a front to a criminal operation that goes far beyond money laundering. The piracy was just a convenient way to bust him and shut down his operations.

  5. Your implication that it is “extortion” to have to pay rights fees is at the heart of why Hollywood coupled with Washington wants to come after web sites.

    The radio, club, movie and TV businesses long ago recognized and agreed that intellectual property creators had economic rights against the use and distribution of their creations. They came to terms and created systems for payment of use.

    As long as the internet industry attempts to circumvent, and yes, STEAL, these peoples’ works, you will have powerful, monied, interests willing to use every means at their legal disposal to enforce reasonable economic claims against thieves and those misappropriating their productions by claiming “fair use”.

    It’s not extortion. You have to have an agreement and a system in place to pay for and distribute use fees based on actual use. Get over it and starting working with your Congressman and web site owners to find an equitable solution. SOPA and PIPA weren’t it. But if you think that is the only law that will come after you, think again. They will find a way to stop piracy. Let’s all hope it’s actually just a solution to paying for what you use and not something that shuts down the future of content distribution. Come on boys and girls. Grow up and accept the principal that you have to pay for what you use.

  6. On Topic: The government should not have the right to turn a civil case into a federal case. On the same note, affiliate marketers should not be held legally liable for what the advertising company does, and the holding company should not be liable for what an affiliate does.

    So it reflects badly on them, who cares, but ultimately, they’re not complaining because they’re getting conversions, they’re complaining because they have to pay for those conversions in the end (my opinion). MegaUpload was pulling in big numbers, and getting big earnings, although they’re conversion rate wasn’t high, I’m sure there are many companies withholding payments that aren’t complaining.

    Off topic:
    Can we get a Ban on Kate Brown? Posts are ridiculous, sad attempts at SEO, and either barely on topic, or totally not paying attention at all… See the comment on this post? She commented on the article of mega upload being shut down too…. Seriously.

  7. The owner of MegaUpload was charged with money laundering, from my understanding, because he paid affiliates each time a file was downloaded. The affiliates upload copyrighted content and distribute it, doing the dirty work, and MegaUpload pays them for doing that, with full knowledge of what they’re doing, so that they can sit back and pretend to be legit. That’s classic mob-style money laundering. (Although I don’t agree with the feds shutting down the service the way that they did.)

    If you’re a network that knowingly pays affiliates to break the law, this could apply to you in theory.

    We’re a content-locking network, and apparently one competitor that has posted on various forums many times to say that they do allow movie sites, is now suddenly saying that they don’t and are suspending accounts. Seems like the MegaUpload case got to them. But there are still a few others that openly accept illegal material. It won’t happen, but I’d love to see the feds bust them for the same thing, because they’re unethical and give everyone a bad name.

  8. After the MegaUpload raid within just a couple days over 14 host closed affiliate programs and/or blocked the US. Some made it to where you can only download your own files.

    To get twitter followers check us out

  9. It’s party unfair to stop megaupload just to demonstrate IPR. If all site are blocked that way, how can you possibly enjoy the free things in life? There’s gotta be a way to promote a software, a movie, or what ever products there are without having to bastardize the free access to some alternatives. Thanks for the info though.


  10. if they are going to start raiding companies that allow affiliates to do illegal activitys maybe EWA is next

  11. I don’t think that after megaupload had been closed some of the affiliate will be scared. Megaupload had been locked due to piracy. Awesome post!

  12. Big government running people’s lives. It will never change if we don’t select the right person into the white house.

    Ron Paul is the candidate that makes so much sense.

    1. Big government running people’s lives. It will never change if we don’t select the right person into the white house.

      Ron Paul is the candidate that makes so much sense.


      Although I like Ron Paul, your comment is extremely uneducated.

      In this particular case, Obama actually opposed SOPA and told Congress to not bother because he would Veto against it anyway.

      Obama, unlike the group of “I-bent-over-for-Hollywood-lobbyists” in congress that introduced the bill, realized the bill went WAY to far and gave government too much power.

      So, get your facts right.

  13. I think megavideo.com ,part of megaupload network of sites was the main reason for the debacle.They allowed pirated hollywood movies and earned millions from ads and premium subscriptions.(They forced users to upgrade to paid membership cos a free user can view certain minutes each day and are only upgraded can view the whole movie )They even not cared to remove the copy righted videos/material even after complaints from original copy right holders

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