Hotfile Lawsuit: MPAA Piracy Charges End In $80 Million Settlement And Shut Down

The Hotfile lawsuit by the MPAA claimed digital piracy and copyright infringement. But it’s ended in a $80 million settlement and is forcing a Hotfile shut down.

As previously reported by The Inquisitr, the MPAA considers Hotfile a Megaupload copycat. Surprisingly, Google intervened in the Hotfile lawsuit on the side of the file sharing website.

Google accused the movie companies, and thus the MPAA, of misleading the court and claimed Hotfile is in fact protected under the Digital Millennium Copyright Act’s (DMCA) safe harbor provision. Google claims services like YouTube, Facebook, Twitter, and Wikipedia still exist in part because of the DMCA safe harbor clause but if it was up to the MPAA those services would be shut down as well.

The MPAA claimed in the Hotfile lawsuit that the website was wrong to only delete external links to copyrighted material instead of deleting the actual files, as well. But this would prevent users from storing their own private copies of copyrighted materials. So Hotfile sent out eight million infringement notices to users, but the MPAA argued this wasn’t enough since they only banned 43 users. Unfortunately for Hotfile, Judge Kathleen Williams agreed with the MPAA’s stance, saying that “the extent of infringement by Hotfile’s users was staggering.”

Chris Dodd, chairman of the MPAA, celebrated the conclusion of the Hotfile lawsuit:

“This judgment by the court is another important step toward protecting an Internet that works for everyone. 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.”

The MPAA had actually sought damages exceeding $500 million although the eventual $80 million settlement was close to the $100 million they actually expected to collect. The Hotfile shut down will go into effect until the website “employs copyright filtering technologies that prevent infringement.” But the digital sharing service had already implemented such filtering technology months after the Hotfile lawsuit began so it’s not quite clear what artificial standards the MPAA has set.

But it’s not immediately clear what the long term repercussions of the Hotfile lawsuit will be. It’s possible the company may be incapable of paying the hefty bill although a counter-suit against Warner Bros is still underway. The movie company allegedly violated the DMCA by wrongfully taking down hundreds of files, including games demos and Open Source software, without holding the copyrights to them.

What do you think about the Hotfile lawsuit? Should the MPAA have such overwhelming power over how people use their files and data?