As the Internet's cyberlocker companies come under sustained verbal attack from Hollywood and the music industry, the major players are fighting back. By retaining Google's lobbying company, leading file-hoster RapidShare has clearly signalled its intent not to go quietly and now its number one competitor, MegaUpload, has responded to what it calls MPAA and RIAA propaganda.

If during 2009 and 2010 the world’s leading cyberlocker companies were feeling the heat, the signs are that 2011 will be a few degrees hotter still. While business is booming, competition is fierce, and more and more companies are looking to get involved in this rapidly expanding but sometimes controversial market.

As reported earlier this week, in traffic terms the number of one-click hosting sites that are now larger than the mighty Pirate Bay – and above them in the Internet’s top 100 sites – has grown to five.

While Hotfile, 4Shared, Mediafire are all significant players on the world stage, market leaders RapidShare and MegaUpload are the companies at the sharp end of accusatory finger-pointing by Hollywood and the music industry.

Now, following on the heels of RapidShare’s fightback, here comes MegaUpload countering what it describes as “grotesquely overblown allegations” of mass copyright infringement.

“We provide connectivity between end users and storage capacity in the cloud, but no content – just like e.g. ADSL providers and hard drive vendors,” the company said in a statement emailed to TorrentFreak. “As a matter of fact, most public Internet services, including backbone carriers, could not exist if the law did not protect them from liability for abuse committed by their users, as long as they fulfill specific requirements, such as the timely processing of abuse notices.”

MegaUpload is a “dual-use tool” comparable to an email account or a USB stick, the company says, and as such can be put to both non-infringing and infringing uses. In dealing with illicit content, MegaUpload says that violations of its terms and conditions are not tolerated and the company abides by the DMCA and quickly processes takedown requests.

Like competitor RapidShare, MegaUpload says that it too goes one step further to accommodate those seeking to remove infringing content from its servers.

“We also cooperate closely with rightsholders and their copyright enforcement agents and provide them with direct realtime takedown access, bypassing the DMCA process entirely. Because we strictly conform to all legal requirements, nobody has ever sued us over copyright infringement, and cases brought forward against our competitors have a long history of being unsuccessful,” the company notes.

MegaUpload also provides some very impressive stats. The company says that not only does it have more than 100 million registered users and in excess of 45 million unique visitors every day, but that employees at more than 70% of the world’s Fortune 500 companies are account holders. It adds that given these numbers, it is unfortunate that the actions of a small group of “black sheep” (aka copyright infringers) can overshadow those of the millions of customers who use their site legitimately every day.

“We have become the de-facto standard for sending files that are too big to email. We are the most popular hard disk in the cloud. We host more backups than any other company. If Mega is a rogue operator as we have been unfairly labelled by the MPAA and RIAA, then what about Google? What about Yahoo? And every single ISP?”

Yesterday, after reading a report by brand protection company MarkMonitor which labelled them as a “leading digital piracy site”, RapidShare threatened to sue for defamation. Google-owned YouTube, apparently due to their takedown policies (which don’t appear to be any more comprehensive), were not included on the list. Today, MegaUpload questioned why it too should be labelled a “rogue site” when Google “probably hosts the world’s largest index of pirated content.”

MegaUpload concludes with a statement that the vast majority of its traffic is legitimate and that their company is here to stay. It also holds out an olive branch.

“If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch.”