File upload service Megaupload.com has been shut down by US authorities for copyright infringement.
Seven employees of Megaupload Limited and Vestor Limited, including the file-sharing sites' founders; Kim Dotcom, who has previously been known as Kim Schmitz and Kim Tim Jim Vestor, and Mathias Ortmann, were among those charged.
The US Justice Department estimated Megaupload.com had cost copyright holder $500m through illegal file-sharing and had generated $175m in illegal profits.
"In exchange for payment, the Mega Conspiracy [the name given to the group arrested by the prosecutors] provides the fast reproduction and distribution of infringing copies of copyrighted works from its computer servers located around the world," the US Justice Department said.
"For more than five years the conspiracy has operated websites that unlawfully reproduce and distribute infringing copies of copyrighted works, including movies – often before their theatrical release – music, television programs, electronic books, and business and entertainment software on a massive scale."
Megaupload allowed web users to post files to the firm's servers. They would then be given a link to the content, which included music, videos and pornography, could be distributed and allow other web users to access the files. Megaupload did not allow web users to search for content and instead relied on those that uploaded the files sharing the link themselves.
The service was free to use but web users could subscribe to get faster uploads and downloads. However, the firm claims it handled complaints about material that infringed copyrights quickly and efficiently.
According to US Justice Department, Megaupload.com has more than 150 million registered users, with 50 million daily visitors and accounted for four percent of the total traffic on the internet. Some 18 domain names associated with the company have been seized by US authorities and subsequently shut down.
"This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime," the US Justice department added.
As well as copyright infringement, the seven have also been charged with conspiracy to commit money laundering, conspiracy to commit racketeering and conspiracy to commit copyright infringement. If convicted they face a maximum penalty of 20 years for the conspiracy to commit racketeering and to commit money laundering as well as up to five years for copyright infringement and conspiracy to commit copyright infringement.
In a revenge attack for the closure of Megaupload.com, hacking group anonymous took down website belonging to the US department of Justice, the FBI and record label Universal as well as and MPAA (America's Recording Industry Association (RIAA) and the Motion Picture Association (MPA).
"Oh noes! Justice.gov seems to be down :( #Megaupload #SOPA #PIPA Expect more! #Anonymous," said one tweet from the hacking group's Anon_Central Twitter account.
Meanwhile, shortly after another read: "Tango down: fbi.gov for taking down #Megaupload.com Payback's a b***h! Expect more! #Anonymous"