Megaupload says it's suing Universal Music Group. Wait, what? File sharing vector suing copyright holder? Megaupload went on the offensive against the recording industry with a video uploaded to YouTube featuring big name artists. Universal had it taken down (we found a mirror).

The recording industry has been mumbling some not very nice things about Megaupload — usually the precursor to some form of attack in these cases — so Megaupload struck first blood. Last Friday, Megaupload put a video on its YouTube account featuring a long list of big name artists literally singing the praises of the online service as a way for artists to share exclusive material and reach new audiences. The list includes P Diddy, Will.i.am, Alicia Keys, Kanye West, Snoop Dogg, Macy Gray, Chris Brown, The Game and Mary J Blige — several of whom have standing contracts with UMG. This, of course, didn't sit too well with the UMG brass who had the videos taken down on the grounds that it violated the record label's copyright. Megaupload of course says that this is hogwash and that the company has individual agreements with all of the artists.

Ack! That's a lot of he said she said blah blah blah. What's this all about? In short, Universal stops believing in an artist's right to free speech if that speech might hurt the label's bottom line. The RIAA, which represents the major record labels, is predictably worried about Megaupload because, you know, the service is used to illegally share copyrighted material. On the other hand, Megaupload says it blocks users who illegally share copyrighted material and that offending material is promptly taken down. Perhaps more at issue than illegal file sharing is the pending relaunch of Megabox — Megaupload's music store. The store worries the labels because it offers artists a 90 per cent cut of sales, which is a much larger chunk than any other store offers. [Torrent Freak]

Update: 
Megaupload went through with it. Megaupload filed a lawsuit against Universal Music Croup in Federal court this afternoon. The papers allege all of the artists in the removed YouTube video were expressing opinions. That some of them happened to have recording contracts with UMG does not mean UMG has the right to compel a video expressing opinions to be taken down. UMG is using DMCA takedown notices based on their contracts with these artists as a way to chill free speech. Seems like a very plausible argument. What say ye now UMG?