File-Sharing site ‘Megaupload’ blackout

Megaupload, one of the internet's leading file sharing sites, has been closed down by authorities in the America.

The site's originators have been blamed with defying piracy laws.

Federal prosecutors have blamed it of costing copyright owners more than $500m (£320m) in lost profits. The company says it was careful in responding to objections about pirated material.

In reply, the hackers group Anonymous has targeted the FBI and US Department of Justice websites.

The stories came a day after anti-piracy law complaints, but prosecutors said they were ordered two weeks earlier.

The US Justice Department said that Megaupload's two co-creators Kim Dotcom, previously known as Kim Schmitz, and Mathias Ortmann were held in Auckland, New Zealand including two other employees of the business at the demand of US authorities. It added that three other defendants were still at large.

"This combat is among the biggest offensive copyright cases ever brought by the United States and straightly hits the exploitation of a public content storage and sharing site to commit and make possible intellectual property crime," said a statement posted on its website.

The FBI website was sporadically unavailable on Thursday evening due to what authorities said was being "treated as a hateful act".

The hackers' group Anonymous said it was executing the attacks.

The Motion Picture Association of America's website also suffered troubles.

The allegation included planning to commit racketeering, copyright violation and money laundering.

A federal court in Virginia ordered that 18 domain names linked with the Hong Kong-based company be captured.

The Justice Department said that in excess of 20 search warrants had been carried out in nine countries, and that roughly $50m (£32m) in assets had been seized.

It said that the blamed had chased a business model designed to support the uploading of copyrighted jobs.

"The conspirators purportedly paid users whom they specially knew uploaded violating content and advertised their links to users in entire the world," a statement said.

"By aggressively supporting the use of third-party linking sites to advertise violating content, the conspirators did not need to advertise such content on the Megaupload site.

"In its place, the accusation claims that the plotters manipulated the insight of content available on their servers by not giving a public search function on the Megaupload site and by not with popular infringing content on the widely available lists of top content downloaded by its users."

Earlier than it was closed down the site posted a statement stating the charges against it were "grotesquely exaggerated".

"The truth is that the largest part of Mega's internet traffic is genuine, and we are here to stay," it added.

"If the content industry would like to take benefit of our status, we are pleased to enter into a discussion. We have some good plans. Please get in touch."

The declaration came a day after a vast majority of websites participate in a "blackout" to complaint against the Stop Online Piracy Act (Sopa) and the Protect Intellectual Property Act (Pipa).

The US Chamber of Commerce has protected the suggested laws saying that enforcement agencies "lack the tools" to efficiently apply existing intellectual property acts to the digital world.

Industry watchers advise this fresh move may feed into the broader debate.

"Neither of the bills are close to being approved- they require more revision. But it shows that authorities are able to utilize existing tools to go after a business claimed to be inducing piracy," said Gartner's media sharing professional Mike McGuire.

"It asks the question that if you can find and detain people who are believed to be involved in piracy using available regulations, then why introduce further laws which are US-only and potentially damaging?"