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market at the time included the main rival RapidShare. As Megaupload grew, 4Shared and MediaFire were also significant names competing for the cyberlocker market — potentially lucrative online storage sites.

They were growing in the same way, although Megaupload's fight for the market was focused on RapidShare, based in Switzerland. The site has proved a focus for constant civil action, which it has so far successfully defended in European courts.

Megaupload had a point of difference from the outset: the company offered incentives to members who uploaded popular content. This would become a thread running through the allegations brought by the FBI — that inducements were offered to upload infringing material. The earliest version of the offer quoted by the indictment stated: "Today we are also introducing our ground breaking Uploader Rewards. Our new reward program pays money and cash prizes to our uploaders. This makes Megaupload the first and only site on the Internet paying you for hosting your files. The more popular your files the more you make." The payments were straight-forward. Rewards saw US$1 paid for each 1000 downloads of files. Those in the top 100 received bonuses — those with the most in a three-month period were paid:

Rank 1: $5,000 USD Bonus
Ranks 2-5: $1,000 USD Bonus
Ranks 6-10: $500 USD Bonus
Ranks 11-50: $100 USD Bonus
Ranks 51-100: $50 USD Bonus

The FBI would later allege the infringing material was pulling in traffic for the website — shown by the reward payments and who received them.

The FBI would point to a June 2008 complaint from copyright holders over one user dubbed VV. They complained he was "currently hosting at least 57 full content movies" and "appears to be using your services to profit from our clients' intellectual property". Megaupload was told "we have already sent over 85 notices of copyright infringement [by VV] to MegaVideo.com", a member of the ever growing Mega-family of sites. VV was classed as a repeat infringer. Payments of $3400 were made to him, the FBI found, from March 2008 until late 2009. Over six years of using the Megaupload sites, they claimed he had "uploaded approximately 16,950 files to Megavideo.com and Megaupload.com". The files were watched 34 million times and "included many infringing copies of copyrighted motion pictures, including Ocean's Thirteen, Ratatouille, and Evan Almighty".

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