It's a bad example to use because the prosecutor claims to have Skype chat logs of Megaupload assisting in the upload of illegal material as well as uploading their own illegal material.
This would instantly remove their DMCA safe harbor protections as it relies on Megaupload not being aware of illegal material on their platform. Further it also requires that Megaupload have no financial gain directly attributable to the illegal material.
So basically if the Skype logs are real and the prosecutor can prove this then Megaupload was rightly indicted and should be prosecuted without the protection of DMCA safe harbor.
As a final note, though, I do note necessarily believe they should have the power to take down the business until after they've proven the illegal activity. Just in case anybody got away with that impression.
If governments and by extension, courts gets pushed enough, laws about safe harbor means nothing. Laws in general means little in this case.
The pirate bay case in Sweden is the best example of this. The by law required impartial police investigator was hired by one of the parties the day after he finished his work. A several order higher paying job. the exact day after he finished his report on the pirate bay. When the police was asked about it, they said it was "common" practice. Later during the trial, the lawyers requested the investigator as witness (to ask about all this), and the investigator refused to return to Sweden when the court agree to the request. This however had no impact whatsoever on the judgment.
The court judgment is also hilarious funny to read, as it include some golden nuggets of complete unknown laws, not written in the actually law books (reason being, work towards a law counts too in Europe, not just what is written). For example, if you produce a service, you might get hanged for it even if you produce it with perfect fine intentions. What counts is the primary usage of said service, so if you produce a tool, and the prosecutor claims that the primary usage of that tool is crime, you can go down for it as facilitator of crime (generic). Its facts like this, that really would have me worried if I created a program like nmap. Hopefully, prosecutors won't realize this law actually exist.
I'm not sure what the pirate bay has to do with Megaupload. I'm not arguing anything in general here, I'm just saying in the specific case of Megaupload there really wasn't foul play outside of procedural errors, if the claims of the prosecutor are true then Megaupload were indeed breaking the law and the DMCA safe harbor protection meant nothing. The Pirate Bay is entirely unrelated.
If your service is protected solely on the concept of safe harbor, that will then only work if you can stay small and unnoticed by the state. As soon your service name pops up in politics, laws like safe harbor will no longer protect you.
The pirate bay case is an example of a website, which though safe harbor would protect them in regard to user-uploaded content. They where wrong in that regard.
Reddit is protected by the DMCA safe harbor rules. Reddit is bigger than MegaUpload. By your logic, the state should long ago have destroyed Reddit.
The reason they haven't is that you're wrong. The DMCA doesn't stop working when you get big. It stops working when you take steps to ensure that infringing content is featured on your site.
For a bulletin board full of nerds, we sure are happy to insult each other's intelligence about what MegaUpload was. What kind of an idiot do you have to be to not understand what made MegaUpload popular? Are you really willing to write a comment in public under your real name saying that MegaUpload was a good piece of software? That sentiment doesn't make you feel embarrassed as an engineer? It was a crappy piracy site; it was popular solely because it was an effective way to upload and download pirated movies and TV shows. If it had been a Dropbox competitor, we'd all be making fun of it, instead of pretending like its founders are technology martyrs.
That may be, I have made no comment regarding that, all I've said is that the Megaupload case is NOT an example of that happening. The Pirate Bay case may very well be, but again, I responded to someone using Megaupload as an example of Government not caring about safe harbor, not TPB.
This would instantly remove their DMCA safe harbor protections as it relies on Megaupload not being aware of illegal material on their platform. Further it also requires that Megaupload have no financial gain directly attributable to the illegal material.
So basically if the Skype logs are real and the prosecutor can prove this then Megaupload was rightly indicted and should be prosecuted without the protection of DMCA safe harbor.
As a final note, though, I do note necessarily believe they should have the power to take down the business until after they've proven the illegal activity. Just in case anybody got away with that impression.