Rapidshare Faces Uncertainty

Rapidshare may soon be shutting down, thanks to a German court ruling that will increase operating costs for the site. Unlike the US, Germany lacks a “safe harbor” provision that exempts companies from liability if they remove user-posted copyrighted material upon request.Rapidshare may soon be shutting down, thanks to a German court ruling that will increase operating costs for the site. Unlike the US, Germany lacks a “safe harbor” provision that exempts companies from liability if they remove user-posted copyrighted material upon request. Due to this, German copyright holding organization GEMA filed a lawsuit against Rapidshare seeking legal sanctions and financial penalties for failing to prevent the posting of copyrighted material to their site.

In its defense, Rapidshare argued that it prevents users from uploading copyrighted materials using two methods. First, an MD5 hash filter prevents reposting of any previously posted, and removed, copyrighted material. In addition, the company has six full-time employees who, responding to complaints, remove copyright-infringing material.

These measures were not enough to please the German court however, ruling, “A business model that doesn’t use common methods of prevention cannot claim the protection of the law.” In order for Rapidshare to follow legal standards, the court declared that the six employees must not only respond to complaints, they must also proactively screen posted content for copyright infringement before the material is available for download.

In the face if this ruling, it is unclear how Rapidshare will react. If the ruling stands, it seems unlikely that hiring more employees to pre-screen content will be both cost-effective and serve to stave off the threat of another lawsuit. Although copyright holders may have won a battle against Rapidshare, other sites like MegaUpload will undoubtedly step up to fill the void.

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