>>"$Deity that's a big compensation claim, and a really, really big lawsuit for defamation and damages against the ones who brought the allegations."
Well, if RIAA/MPAA hadn't done much more than complain about the seeming inadequacy of the takedown responses and give whatever evidence they had over to the authorities, unless the data they provided was actually fabricated, once the authorities took the ball and ran with it, I think that probably leaves the original complainants largely, if not entirely, off the hook.
If someone told the police that their neighbour seemed to be involved in all kinds of strange stuff - odd late-night comings-and-goings, always flashing wads of cash around, etc, strange herbal smells they couldn't quite place, etc - and after some surveillance which gave them legal justification for a raid, the police raided his place and didn't find enough evidence of criminality to charge him, even if the raid screwed his business, I doubt he'd have any obvious comeback against the original complainer if they hadn't made anything up.
In the normal course of events, he might not even have the right to ask who the complainer was, even if he might suspect.
Even if it came to going after the police, while they might not have enough evidence for criminal action, depending what he was actually doing and how dubious it looked (or could be made to look), he might not necessarily have a great chance of portraying himself as an poor innocent victim of harassment.
>>"Whatever happens, this is going to be very, very interesting - and likely utterly devastating for the RIAA and MPAA either way."
It's certainly going to be interesting, but I'm not entirely sure it's an RIAA-killer.
if the case succeeds, they seem to win to some extent, and can still argue that the law needs strengthening to make action against these awful pirates and their helpers easier, and or to aid dealing more easily with more-overseas-based operations.
But if not, they have a pretty good excuse to argue that the law can't be strong enough if these terrible people can make so much money by effectively knowingly profiting from infringement without being liable.
Let's face it, Kim is a pretty convenient guy to have as a target, whether the first shot hits ('he's guilty!') or misses ('we need better weapons!"').