Federal prosecutors have accused it of costing copyright holders more than $500m (£320m) in lost revenue.

The US Justice Department said that Megaupload's two co-founders Kim Dotcom, formerly known as Kim Schmitz, and Mathias Ortmann were arrested in Auckland, New Zealand along with two other employees of the business at the request of US officials.

A federal court in Virginia ordered that 18 domain names associated with the Hong Kong-based firm be seized.

The Justice Department said that more than 20 search warrants had been executed in nine countries, and that approximately $50m in assets had been seized.

Customers of the Elisa and Saunalahti internet service providers can no longer use those internet connections to visit The Pirate Bay website. Helsinki District Court ordered the ISPs to block the Pirate Bay last October, but the block went into effect Monday.

As of Monday evening, at least one Pirate Bay mirror site in operation on servers outside Sweden was reportedly not blocked to Elisa and Saunalahti customers. Meanwhile, one domain name that previously linked to The Pirate Bay, but now takes users to the website of Electronic Frontier Finland was blocked for Elisa and Saunalahti subscribers.

Even in the RIAA’s headquarters several people use BitTorrent to download pirated music, movies, TV-shows and software. And they are in good company. The Department of Homeland Security – known for seizing pirate domain names – also harbors hundreds of BitTorrent pirates.

Earlier this week we already showed that there are BitTorrent pirates at Sony, Universal and Fox. A few days later it was revealed that torrents are being downloaded in the palace of French President Nicholas Sarkozy.

Aside from recent music albums from Jay-Z and Kanye West – which may have been downloaded for research purposes – RIAA staff also pirated the first five seasons of Dexter, an episode of Law and Order SVU, and a pirated audio converter and MP3 tagger.

Gavin “Tex” Warren reveals how he was instructed to boost statistics, link piracy to drug trafficking, and manipulate the police in order to secure more interest for the war on piracy.

“Funded solely by MPAA, AFACT lobbies hard for changes to Australian law and enhance the sexiness of their case by making vague references to links to terrorism. Sometimes not so vague. I was instructed to tell police officers that the profit margins were greater than dealing heroin. It was bizarre. A twisted logic that AFACT spewed out with monotonous regularity,” Warren says.

The Florida-based file-hosting service Hotfile has sued Warner Bros. for fraud and abuse. Hotfile accuses the movie studio of systematically abusing its anti-piracy tool by taking down hundreds of titles they don’t hold the copyrights to, including open source software.

"Warner continued to make these misrepresentations even after Hotfile explicitly brought this rampant abuse to Warner’s attention, ruling out any possibility that its wrongful actions were accidental or unknowing,” Hotfile writes in its complaint.

Hotfile has repeatedly notified Warner about this issues, but instead of improving the takedown system the number of fraudulent takedowns only increased.

“By increasing the number of links it was taking down with Hotfile’s SRA, and indeed falsely inflating these numbers, Warner was increasing the number of times it could present ecommerce links to Hotfile’s users for its own enrichment,” Hotfile argues in the complaint.

The entertainment industry always seems to think that the next thing they do will suddenly kill off piracy. They file lawsuits, they shut down sites, they change laws, they, finally (kicking and screaming), agree to license innovative new services... and then they declare victory over "piracy."

None of the actions taken by the industry appear to have slowed down infringement online. Instead, it appears that it just keeps growing.

"The traffic light-a green tick or red cross-would appear next to a link to the site in question. The traffic light can be applied wherever the site is, not just those in the UK, increasing the ability of consumers to protect themselves from sites hosted abroad and increasing their confidence in legitimate sites."

"If a site has ignored a number of takedown requests, then we believe that it is fair to categorise the site as a risk and show a warning signal to consumers that are approaching it," the document adds.

Talking to a source within GfK who wished to remain anonymous, Telepolis found that a recent study looking at pirates and their purchasing activities found them to be almost the complete opposite of the criminal parasites the entertainment industry want them to be.

They are also found to purchase more DVDs than the average consumer, and they visit the movie theater more, especially for opening weekend releases which typically cost more to attend.

The conclusion of the study is that movie pirates are generally more interested in film and therefore spend more money and invest more time in it. In other words, they make up some of the movie industries best customers.

Dumpster Drive is a file-sharing application that recycles digital files. Using dumpster diving as a model for recirculating unwanted objects, Dumpster Drive allows others to dig through files that you delete on your computer in a passive file-sharing network.

"Child pornography is great," the man said enthusiastically. "Politicians do not understand file sharing, but they understand child pornography, and they want to filter that to score points with the public. Once we get them to filter child pornography, we can get them to extend the block to file sharing."

The date was May 27, 2007, and the man was Johan Schlüter, head of the Danish Anti-Piracy Group (Antipiratgruppen).

"We must associate file sharing with child pornography. Because that's something the politicians understand, and something they want to filter off the Internet."

The copyright industry lobby is actively trying to hide egregious crimes against children, obviously not because they care about the children, but because the resulting censorship mechanism can be a benefit to their business if they manage to broaden the censorship in the next stage.