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Hotfile To Pay $80M In Settlement

Sat Dec 07, 2013 6:53 pm

Filesharing website Hotfile has been ordered to pay $80m to movie studios, and shut down unless it starts using filtering technology to prevent copyright infringement of their works.

The settlement came just before a court case triggered by a lawsuit against the online storage service, led by industry body the MPAA – its second such victory in a matter of months, following the shutdown of BitTorrent search engine IsoHunt in October.

"This judgment by the court is another important step toward protecting an Internet that works for everyone," said MPAA chairman and chief executive Chris Dodd in a statement.

"Sites like Hotfile that illegally profit off of the creativity and hard work of others do a serious disservice to audiences, who deserve high-quality, legitimate viewing experiences online."

While the MPAA claims that suitable filtering technology is available for sites like Hotfile to use, the website appears to have opted to close instead. "As a result of a United States federal court having found Hotfile.com to be in violation of copyright law, the site has been permanently shut down," explains a message on its homepage.

"If you are looking for your favorite movies or TV shows online, there are more ways than ever today to get high quality access to them on legal platforms."

Hotfile is one of the larger "cyberlockers", having launched in 2009 and grown to 5.3m registered users. In documents filed as part of the lawsuit, the company said the 123m files stored on its servers had generated more than 2.9bn total downloads.

The studios had claimed that more than 90% of Hotfile's daily downloads were of copyrighted content, although the company had argued that it was merely an online storage service that was not responsible for its users' behaviour.

That defence strategy had already been given a major setback when, ahead of the trial, US District Judge Kathleen Williams ruled that Hotfile did not qualify for "safe harbor" protection under US copyright laws – legislation that protects internet companies from being held liable for copyright infringement if they remove offending materials when notified by a copyright holder.

The MPAA is celebrating the settlement as "the first time that a US court has ruled on whether so-called cyberlockers like Hotfile can be held liable for their infringing business practices". More lawsuits may follow, with the MPAA and its equivalent bodies from other creative industries focus their anti-piracy strategies on websites rather than individual filesharers.

The MPAA had already secured the shutdown of IsoHunt in October, in a similar settlement ahead of a court case that saw the company agree to pay studios $110m in damages.

Meanwhile, the criminal copyright infringement case involving the most famous cyberlocker of them all, Megaupload, remains up in the air as the company's founder Kim Dotcom battles extradition from New Zealand.

Since his site was shut down in January 2012, Dotcom has launched a new service, Mega, which has attracted 5 million users since its launch in January 2013.

This week's settlement may not be the final curtain for Hotfile, however. Within days of IsoHunt shutting down, the site had been resurrected by a group unaffiliated with the original website claiming that "IsoHunt can definitely be called a filesharing icon. People got used to it and they don’t want to simply let it go."