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MegaUpload slapped with suit by six major Hollywood studios

The MPAA says the now-defunct file-sharing site should pay millions because it allegedly infringed on copyrighted movies and TV shows, while encouraging others to do the same.

MegaUpload founder Kim DotCom
MegaUpload founder Kim Dotcom 3News

MegaUpload is being sued, again, but this time it's not the feds going after the file-sharing service -- it's movie studios.

Six of the top US movie studios filed a complaint (PDF) in the US District Court for the Eastern District of Virginia on Monday alleging that a handful of MegaUpload's administrators knowingly infringed on movie and TV show copyrights and encouraged others to do the same.

"When was shut down in 2012 by US law enforcement, it was by all estimates the largest and most active infringing website targeting creative content in the world," Steven Fabrizio, the Motion Picture Association of America's senior executive vice president and global general counsel, said in a statement emailed to CNET.

The suit was filed by Twentieth Century Fox Film, Disney Enterprises, Paramount Pictures, Universal City Studios Productions, Columbia Pictures Industries, and Warner Bros. Entertainment. The studios hope to recover some of the $175 million that MegaUpload allegedly earned from its file-sharing business. The suit doesn't give an exact number for the damages being sought, but the studios could get up to $150,000 per infringement, along with any profits that MegaUpload allegedly generated.

Upon hearing about the new lawsuit, MegaUpload founder Kim Dotcom took to Twitter with a slew of tweets saying that the suit's allegations were "simply not true."

"Just like the DOJ criminal case against #Megaupload the @MPAA case is a load of nonsense and won't succeed after scrutiny of the facts," read one tweet.

The feds shut down MegaUpload in January 2012, charging Dotcom with racketeering, copyright infringement, money laundering, and more. Federal authorities claim that Dotcom pocketed millions of dollars in illegal profits from illegal file sharing and downloading, which reportedly cost the film industry more than $500 million in damages.

MegaUpload was one of the most popular video destinations on the Web before it was shut down, with reportedly 50 million users per day who shared and streamed files.

Dotcom is currently living freely in New Zealand as the US government seeks his extradition. The feds' allegations don't seem to scare him -- a few months after MegaUpload was shuttered, Dotcom launched a similar startup called Mega that he claimed was raid-proof.

The movie studios' new lawsuit names as defendants MegaUpload Ltd., Dotcom, Vester Ltd., which was allegedly a majority shareholder of the site, and a couple of other alleged administrators -- Mathias Ortmann and Bram van der Kolk.

"MegaUpload was built on an incentive system that rewarded users for uploading the most popular content to the site, which was almost always stolen movies, TV shows and other commercial entertainment content," Fabrizio said. "MegaUpload wasn't a cloud storage service at all, it was an unlawful hub for mass distribution."