Indicted Megaupload founder Kim Dotcom launched a new file-sharing
website that promises users greater privacy and defies the U.S.
prosecutors who accuse him of facilitating massive online piracy.
colorful entrepreneur unveiled the "Mega" site ahead of a lavish gala
and news conference at his New Zealand mansion on Sunday night, the
anniversary of his arrest on racketeering charges related to his
now-shuttered Megaupload file-sharing site. The site Dotcom started in
2005 was one of the most popular sites on the Web until U.S. prosecutors
shut it down and accused him and several company officials of
facilitating millions of illegal downloads.
In Dotcom's typical
grandiose style, the launch party featured a tongue-in-cheek
re-enactment of the dramatic raid on his home a year earlier, when New
Zealand police swooped down in helicopters onto the mansion grounds and
nabbed him in a safe room where he was hiding.
"Mega is going to
be huge, and nothing will stop Mega - whoo!" a gleeful Dotcom bellowed
from a giant stage set up in his yard, seconds before a helicopter
roared overhead and faux police agents rappelled down the side of his
mansion. Dotcom eventually ordered everyone to "stop this madness!"
before breaking out into a dance alongside miniskirt-clad "guards" as
Bravado aside, interest in the site was certainly
high. Dotcom said half a million users registered for Mega in its first
U.S. authorities are trying to extradite the German-born
Internet tycoon from New Zealand, where he is free on bail. Prosecutors
say Dotcom made tens of millions of dollars while filmmakers and
songwriters lost around $500 million in copyright revenue.
prosecutors declined to comment on the new site, referring only to a
court document that cites several promises Dotcom made while seeking
bail that he would not - and could not - start a Megaupload-style
business until the criminal case was resolved.
"I can assure the
Court that I have no intention and there is no risk of my reactivating
the Megaupload.com website or establishing a similar Internet-based
business during the period until the resolution of the extradition
proceedings," Dotcom said in a Feb. 15, 2012, affidavit.
argues that he can't be held responsible for copyright infringement
committed by others and insists Megaupload complied with copyrights by
removing links to pirated material when asked.
"Our company and
assets were taken away from us without a hearing," Dotcom said. "The
privacy of our users was intruded on, communications were taken offline
and free speech was attacked. Let me be clear to those who use copyright
law as a weapon to drown innovation and stifle competition: You will be
left on the side of the road of history."
Mega, like Megaupload,
allows users to store and share large files. It offers 50 gigabytes of
free storage, much more than similar sites such as Dropbox and Google
Drive, and features a drag-and-drop upload tool.
difference is an encryption and decryption feature for data transfers
that Dotcom says will protect him from the legal drama that has
entangled Megaupload and threatened to put him behind bars.
decryption keys for uploaded files are held by the users, not Mega,
which means the company can't see what's in the files being shared.
Dotcom argues that Mega - which bills itself as "the privacy company" -
therefore can't be held liable for content it cannot see.
he's trying to do is give himself a second-string argument: 'Even if I
was wrong before, this one's all right because how can I control
something if I don't know that it's there?'" said Sydney attorney
Charles Alexander, who specializes in intellectual property law. "I can
understand the argument; whether it would be successful or not is
To Dotcom, the concept is very simple.
"If someone sends something illegal in an envelope through your postal service," he says, "you don't shut down the post office."
Motion Picture Association of America, which filed complaints about
alleged copyright infringement by Megaupload, was not impressed.
are still reviewing how this new project will operate, but we do know
that Kim Dotcom has built his career and his fortune on stealing
creative works," the MPAA said in a statement. "We'll reserve final
judgment until we have a chance to take a closer look, but given Kim
Dotcom's history of damaging the consumer experience by pushing stolen,
illegitimate content into the marketplace, count us as skeptical."
as much as Dotcom's new venture might enrage prosecutors and
entertainment executives, it shouldn't have any impact on the Megaupload
"All it might do is annoy them enough to say, 'We're going
to redouble our efforts in prosecuting them'," said Alexander, the
attorney. "But I don't think it makes any practical difference to the
Dotcom denied the new site was designed to provoke
authorities, but got in plenty of digs at their expense, saying that
their campaign to shutter Megaupload simply forced him to create a new
and improved site.
"Sometimes good things come out of terrible
events," Dotcom said. "For example, if it wasn't for a giant comet
hitting earth, we would still be surrounded by angry dinosaurs hungry,
too. If it wasn't for that iceberg, we wouldn't have a great Titanic
movie which makes me cry every time I see it. And if it wasn't for the
raid, we wouldn't have Mega."