Freedom Fighter or Criminal Mastermind?
By Susan CheneryAugust 8, 2012
Kim Dotcom styles himself a freedom fighter. The United States reckons the New Zealand-based founder of Megaupload is the world’s biggest criminal copyright thief. How will the story of Hobbiton versus Hollywood end?
It was the full Hollywood action production. Helicopters swooping down at dawn. Dogs, dozens of police and elite special-tactics personnel armed with automatic assault weapons bashing in the doors with sledgehammers, screaming "Get down! Get down! Get down!"
In the vast white mansion, their quarry was activating electronic alarms, fleeing into a fortified room. Under attack, he pressed the panic button — not realising the police were already in the house and that they had come to arrest him. Handily, they had brought circular saws to cut him out of his safe room. He had not unlocked the cupboard that contained a sawn-off shotgun. In other parts of the house they dragged out his heavily pregnant wife, terrified the Filipino nannies, and dragged staff out to handcuff them face-down on the lawn.
As the sun rose, it seemed all that was missing was a heaving, smudged Bruce Willis and a dramatic soundtrack. Naturally, when the Motion Picture Association of America (MPAA) persuades the FBI to go after someone, the sting has to be carried out with as much noise and fury as can possibly be mustered — preferably with explosions. A polite knock on the door was not in the script. Subtlety is bad for box office.
But there was, as it turned out, a slight problem of context.
And the suspect being pursued with such farcical force was not a drug baron or an international terrorist, it was a fat German internet guy.
"The only thing even faintly violent about him is his taste in lurid artworks," noted the New Zealand Listener. Indeed in court this week, the Special Tactics Group sergeant involved "could not point to evidence" that the man targeted in the airborne raid that day was armed and dangerous.
"He would have complied completely," said the security guard at the mansion, if they had arrived at the door with an arrest warrant in the normal fashion. "He would have invited them in for breakfast."
CUT TO A GREY, wintery afternoon in Auckland, four months after the January 2012 blitz. In the more prosaic corridors of the North Shore District Court, the battle is continuing, albeit in rather more sedate and orderly fashion. Surrounded by lawyers is the big man who had caused the big problem.
Kim Dotcom, 38, had been charged that turbulent morning, along with six colleagues, with what the US Department of Justice trumpeted as "one of the largest criminal copyright cases in U.S. history". The indictment was damning; 72 pages of table-thumping outrage. Dotcom's file-sharing company, Megaupload, was "by all estimates ... the largest and most active criminally operated website targeting creative content in the world".
Court documents listed the respondent simply as The United States of America. It's hard to think of a more powerful nemesis.
MEGAUPLOAD WAS ONE of the world's most popular cloud storage sites, a cyber-locker that allowed users to quickly upload and download and send attachments that are too large to send via email — attachments such as videos, photographs and music. Movies and other entertainment cost money to make — but not everybody buys when they can just "share". Megaupload was where they shared.
Megaupload has been taken down, Dotcom's assets have been frozen and he is under house arrest as he awaits an extradition hearing, now moved to March next year.
(This week, in the Auckland High Court, the Crown was appealing a decision made by Justice Winkelman last month that the raid was unlawful. Meanwhile in Virginia, a US District Court ruling is expected any day in United States v. Dotcom, after the defence asked for the case to be dismissed on the grounds that Megaupload was operating outside US jurisdiction.)
At the April hearing, Dotcom was grinning from behind blue-tinted glasses, a mountainous presence in fleece sweater, jeans and baseball cap over close-cropped hair — a casual anomaly among a sea of suits. Although he faces 20 years in prison if convicted, his insouciance has been astonishing.
He calls the indictment "nothing more than a press release ... designed to make me look as bad as possible".
He has taken to Twitter, Facebook, and his own website teasing and taunting his adversaries. Under house arrest, still reporting to the police three times a week, he has emerged as a hero of the revolution, a self-styled freedom fighter, offering glimpses into life in the mansion with messages like "Team Dotcom preparing for an epic battle of Good vs Evil; Tomorrow vs Yesterday; Freedom shall prevail."
"It is like the weapons of mass destruction in Iraq," Dotcom told John Campbell for New Zealand's TV3 of his violent arrest. "If you want to go after someone and you have a political goal you will say whatever it takes. I am an easy target. My flamboyance … but everyone around me knows I am no criminal."
In a letter addressed "Dear Hollywood" and published in The Hollywood Reporter, he wrote: "The very powerful and the very stupid have one thing in common. Instead of changing their views to fit the facts, they try to change the facts to fit their views," before challenging, "You know where to find me. Unfortunately I can only do lunch in New Zealand".
When his Filipino wife, Mona, delivered twins in March, he reportedly told doctors to send the placenta "to the FBI for forensic analysis so they can verify that there is no pirate DNA".
But this is about far more than just one man against the system, a large David fighting an even larger Goliath. This is a landmark case that has global ramifications. It is about who controls the content in a medium that knows no borders or countries, that is morphing, growing, accelerating at unstoppable speed, and which has billions of participants. It is about old Hollywood versus new media, anarchy and freedom versus the establishment. It's an old, old story being played out in a slick digital medium. Above all, it is about politics and the rights to hundreds of millions of dollars. And its outcome will affect us all.
Or as the Guardian put it, "This vast culture of free stuff, this virtual life, this new dimension of existence in which one of the surest ways to actually make money appears to be copyright theft — has it perhaps in some hard-to-define way contributed to the paralysis of western economic growth?"
"I don't think there has ever been a case of this sort," says Willie Akel, Auckland lawyer for the defence.
Ira Rothken, lead attorney for the defence in the US: "At the end of the day you don't have any criminal activity going on, but at its heart it is a political and economic issue. Hollywood politics versus Silicon Valley politics. You have this tension between the Hollywood content owners versus the technology innovators. The best way to resolve these things is to have a balance so that tech companies can grow without being sued into oblivion and Hollywood can have a stake in the economics."
The raid on the mansion was a spectacle specifically designed, says Rothken, to have "a chilling effect" on other Internet service providers and cloud storage companies.
Rothken believes that what should have been a "philosophical debate with the copyright extremist view of the world" — Hollywood — should never have been brought into the criminal courts. Napster and Grokster, both music sharing sites which were closed down for copyright infringement, were dealt with as civil matters brought by the musicians themselves.
"The case is, at its core, a case where the US are trying to hold Megaupload, Kim Dotcom and the others responsible for the acts of the users of the cloud storage. That is what in the US is secondary copyright infringement. And there is no criminal statute for secondary copyright infringement in the US. So we believe that case is wrong on the merits," he says.
"The economics of Hollywood can't be more sacred than the economics of Internet and technology growth. And that is where the problem is right now. Because just as much as Hollywood can create copyright maximalism, Silicon Valley and technology companies are going to make money and they are going to grow. And so whatever millions are made by Hollywood by having copyright maximalism [there] is a greater amount of money lost to Internet innovation."
The question is, who is going to be held responsible for copyright infringement? Obviously the law enforcement agencies can't go after every one of the millions of people who download movies and music everyday.
"If you want to look objectively at [Megupload, which had] four per cent of all the Internet traffic," says Rothken, "it is probably going to have a lot of good things and a lot of bad things going through it. And so what is going on is that it appears the United States is trying to cherry-pick bad things within the Internet traffic that individual users store and operate, and say, 'Hey, look, there is copyright infringement in storage places and we are going to make Megaupload criminally liable for that.'"
He does make himself a target. "I miss you baby. Our love will reunite us. Stay Strong," Dotcom recently tweeted along with a photo of the subject of his longing — his fabulous pink, open-topped vintage Cadillac — being taken out of his compound on a truck last January. Among the few people who can live on the scale of a Kim Dotcom are the movie executives with their own mansions and toys in California.
The Caddy was impounded — along with a Rolls-Royce Phantom, NZD5 million worth of supercars, jet skis, paintings, NZD11 million in cash, and the data from the hard drives of 135 computers. Clones of the hard drives were spirited to America without permission, to be examined by the FBI for evidence in what New Zealand's Justice Helen Winkelman ruled in June was an unlawful act.
QC Paul Davison told the Auckland High Court this was "excess of authority" on the part of the US law enforcement agencies. Though you would not perhaps want to be the FBI agents required to trawl through 10 million emails, they have so far refused to return the hard drives to the defence. In January Dotcom spent a month in prison charged with copyright infringement, racketeering and money laundering, and has said on his first night he was woken every two hours. His wife still has nightmares triggered by the dawn raid.
The once heavily trafficked website Megaupload is covered in US government seals from the Department of Justice and the FBI. Currently NZD88 million from the company's bank accounts is frozen. Dotcom has been shut down, he told tv3 in March, "without a trial or hearing. This is completely insane ... A company that was worth a billion-plus has been given a death sentence without a trial ... All my lawyers are basically working without a penny. And they are all still on board because what they see here is unfair, is unreasonable and is not justice."
In March, NZ’s High Court returned him a Mercedes and some NZD40,000 a month for living expenses, drawn from his frozen accounts and assets.
Dotcom told TV3 that Megaupload had spent millions on legal advice, and that the company’s lawyers "always told us" that as an online service provider and the company was not liable for the actions off it users, "that we are secure".
"As long as we follow a regime of taking things down which are reported to us, which we have done over all these years, we are protected according to the law," he said.
"There are other laws that protect users, those are privacy laws. For example in the US it’s the Electronic Communication Privacy Act which prohibits us from looking into the files of users. It is like mail; it is private. We cannot just go in there and police what these users are uploading … So we have legally binding agreements with these users that they are not allowed to download something that does not belong to them," he said.
"I am no piracy king. I offered online storage and bandwidth to users and that is it," he said, calling himself an innovator who simply created software and solutions and money.
In the Megaupload take-down, millions of people, including soldiers serving in the Middle East, lost photos and material they considered precious enough to seek storage and back-up for them.
IF DOTCOM APPEARS TO HAVE A FLAIR for fighting the law, perhaps it's because this isn't the first time he's been on the wrong side of it, nor the first time he's faced extradition, nor the first time he has been forced to sample prison food. In fact, his past would suggest he's an old hand at this process.
Pioneering has its perils. But the thing is, this time Dotcom might not be guilty.
Cherubic and buffoonish though he appears, this 200 cm tall, 136-kilo guy is no innocent. In fact, he has conspicuously broken plenty of rules in his 38 controversial years.
Born Kim Schmitz to a reportedly alcoholic father and Finnish mother in the north-German city of Kiel, his mother is said to have worked as a cook, his father worked on a cruise liner, and they divorced soon after his birth. When the young Schmitz showed early signs of delinquency, child services were obliged to send him to a hostel for wayward teenagers. But he was just getting started; it could be argued that he remains a delinquent to this day, albeit a wildly successful one whose many millions allow him to indulge his tendencies. He is said to have hacked into his first computer at age 12.
It has been reported that he was a student at a Hauptschule school for students of low ability, who are not destined for university. He lived in student accommodation where children from disturbed homes were sent by the Youth Office. The former head teacher toldThe Times that he was "gifted technically" and liked "to mess around" but "did not participate much socially". He became overweight, former friends told German newspapers, because of all the time he spent sitting in front of computers.
In fact his later achievements are all the more remarkable for what he has overcome. It's as if he's always had a need to be noticed, exhibiting the kind of braggadocio that often covers a less colourful and confident internal character. Dotcom has never done things quietly or discreetly. As a teenager he was a celebrated hacker, a member of the Chaos Computer Club in Berlin, openly boasting of his exploits as a modern-day cyber pirate — attention-seeking behaviour he now rather ruefully acknowledges might have helped to bring the FBI so thunderously to his door.
But as a kid, wasn't he just doing what any self-respecting nerd would be doing alone in his darkened room out there on the wild frontier of cyber-space? Wasn't he just attempting to go where no nerd had gone before — into other people's business?
As Ira Rothken points out, "[Apple cofounder] Mr. Wozniak and [Facebook founder] Mr. Zuckerberg were 'hackers', and also successful tech visionaries. In addition, one person's dropping out of mainstream schooling is another person's manifestation of brilliance — see Bill Gates, Steve Jobs, and Mark Zuckerburg."
Dotcom's hacker friends would later turn against him and accuse him of taking credit for other people's work. His boasts included telling London's Telegraph in 2001 that he had hacked Citibank and transferred $20 million to Greenpeace, a claim denied by Greenpeace. He also claimed to have hacked NASA and read top-secret information on Saddam Hussein.
What he definitely did do was steal phone calling-card codes and set up toll chat lines in the Caribbean and Hong Kong, using a program to call the lines with the stolen card numbers.
The FBI was undoubtedly also interested to hear that he had at one stage set up a computer system for the uploading and downloading of pirated PC software, and charged people for access. Rothken says Dotcom was "pre-college age and most likely pre-high school age" at the time.
In March 1994 he was arrested in Germany for trafficking in the stolen calling-cards, held in custody for a month, then arrested again on hacking charges, and released again. In 1998 he was convicted of 11 counts of computer fraud, 10 counts of data espionage and other charges. He received a two-year, suspended sentence because, at just 20 years old, he was under-age.
He has said that after this, he decided to go legit, and use his hacker credentials to start a security company Data Protect.
He landed a contract with Lufthansa after spotting a security glitch, and began to earn the money that he would invest in creating his own legend.
When he sold an 80 per cent stake in Data Protect in 2000 to TUV Rheinland, he embarked on a sort of ironic parody of the life of the super-rich playboy. There's Dotcom, on YouTube, posturing on super-yachts, in private planes, in luxurious hotels, in hot tubs with models, shooting in Scotland in spats, and in a helicopter that bears his online name, Kimble (after The Fugitive). A self-produced film, Kimble Goes Monaco, featuring a centrefold, was a road movie about a lavish trip to the Monaco Grand Prix. He was also photographed all over the world, by way of documenting the fast life and high times of a mogul who called himself "Dr Evil". His critics say this was a carefully honed image designed to attract business opportunities and promote his business, and that the private planes he posed in where not his.
These images were old stuff, childish stuff, he told TV 3. "I am a fun-loving guy, okay? I enjoy my life, I have a big kid inside me and I didn’t see any reason why I have to wear a suit and be stuck up … when I have earned my money and, you know, enjoyed my life, fulfilled my dreams, there is nothing wrong with that."
To this he added, "Those clips were long before I had a wife and a family and kids, you know, my priorities have changed. I’m a family man, you know, I am not doing these kinds of things … it was fun at the time and I don’t regret it, but that is not me today, I am a different guy."
In 2002 he was in trouble again: He'd bought USD330,000 worth of shares in LetsBuyIt.com, announcing that he would invest about USD45 million in the failing company. When the shares rocketed he sold without making any investment, netting a profit of about USD1.34 million. He was arrested in Bangkok and extradited to Germany, where he spent five months in jail before being found guilty of insider trading.
In 2003 he pleaded guilty to embezzlement, having taken a USD300,000 unsecured loan from Monkey AG, an e-payment business he launched with venture capital from private-equity company BMP. "Everything that has grown up around Mr. Schmitz is, to say the least, somewhat dubious," spokesman Tobias Kerchoff from TUV Rheinland told the German business site Handelsblatt.com. Said The Hollywood Reporter: "He would later claim to have been 'dazzled', unaware that he would be unable to repay the loan."
To escape the irritating innovation-quashing German laws of financial regulation, he fled to Hong Kong and set up a network of companies. In an attempt to leave his questionable reputation behind, he changed his name to Dotcom and acquired a passport in the name of Kim Tim Jim Vestor, using the address of a step-sibling in Finland.
He moved to New Zealand from Hong Kong, Dotcom told John Campbell on TV 3, for the fresh grass, trees and birds. “I wanted to give my kids an environment of, you know, happiness and nature and peace … [here] you don’t have nuclear power, you are not on any target list of any nuclear nation, you know, it’s amazing. New Zealand is a beautiful country. We came here on a holiday, we fell in love and we decided to move here for our kids, to give them a great future."
When he arrived in New Zealand, Dotcom moved into the most expensive house in the country, renting the NZD30 million house because his criminal record prohibited him from buying it. To facilitate his family's immigration process, he invested NZD10 million in government bonds and the Christchurch earthquake appeal. (In 2011, as an upstanding, newly minted New Zealand citizen, he also paid NZD1 million for Auckland's New Year's Eve fireworks.)
In an email to his startled new neighbours last year, he admitted his past and advised them of the perks of having a reformed fraudster next door: "First of all let me assure you that having a criminal neighbour like me comes with benefits," he wrote. "Our newly opened local money laundering facility can help you with your tax-fraud optimisation. Our network of international insiders can provide you with valuable stock tips."
But, he added that he had changed. "In all seriousness: my wife, two kids and myself love New Zealand and 'We come in peace.' 15 years ago I was a hacker and 10 years ago I was convicted for insider trading. Hardly the kind of crimes you need to start a witch-hunt for. Since then I have been a good boy, my criminal records have been cleared, and I created a successful Internet company that employs 100+ people."
Dotcom told TV 3 he started Megaupload in 2005 because he had tried to send an email to a friend, only to find it was too large. "The mail service refused to send it. I thought 'What can I come up with? What can I do to solve that?' I basically created a service where I could upload a file. I got a unique link, and then I would just email that link to my friend and he would then get the file. And that is how Megaupload started, just a solution to a problem. It grew virally because every time someone submitted a file to Megaupload to send to someone else that person also learned about Megaupload. It was such a useful tool."
What attracted the interest of the MPAA was the sheer size of the operation.
By the time of Dotcom's arrest seven years after starting Megaupload, it had become one of the world's biggest file-sharing sites and accounted for four per cent of Internet traffic — roughly 800 file transfers every second. It offered 180 million users remote storage of movies, music, photographs and personal information. According to the indictment, it had had "more than one billion visitors in its history [and] and 50 million daily visits".
It also, according to the MPAA, "made more than $175 million through subscription fees and online ads, while robbing authors and publishers, movie makers, musicians, video game developers and other copyright holders of more than $500 million".
According to the MPAA, Megaupload and other sites of its ilk "threaten the livelihoods of the 2.2 million hard-working Americans whose jobs depend on the motion picture and television industry, and the millions of others who produce creative content in this country." And what’s more, "For all of the workers in our industry and their families, copyright theft means declining incomes, lost jobs and reduced health and retirement benefits."
"Come on, guys," said Dotcom in his open letter to Hollywood. "I am a computer nerd. I love Hollywood and movies. My whole life is like a movie. I wouldn't be who I am if it wasn't for the mind-altering glimpse at the future in Star Wars. I am at the forefront of creating the cool stuff that will allow creative works to thrive in an Internet age. I have the solutions to your problems. The fact remains that the benefits of Megaupload to society outweigh the burdens. I am not your enemy."
The association was unmoved. In a press briefing on August 2 in Virginia, its senior vice president for Internet content protection, Marc Miller, said: "The case is not about Internet freedom. It is solely about a career criminal and his associates who ran a website that was built upon stealing and distributing the hard work of creators who make creative works that audiences love."
At the same hearing US authorities argued for the Hong Kong-based Megaupload's assets to remain frozen "forever". The judge, however, had some doubts as to whether the US can serve a foreign country with criminal charges. Judge O'Grady noted that the "plain language" of the law required sending notice to the company's address in the United States. "You don't have a location in the United States to mail it to," he said. "It's never had an address" in the United States, O'Grady said, adding sarcastically that Congress intended to allow foreign corporations like Megaupload to "be able to violate our laws indiscriminately from an island in the South Pacific".
The prosecution said it could wait for the extradition because then it would have an address to mail him — prison.
It is reported that Dotcom made $42 million in 2010. So much money so quickly, and it was so damn easy to join the tycoons, moguls and oligarchs of this world. His sense of omnipotence in the days before his downfall was reflected in the number plates of his cars: the Rolls-Royce was "God"; while others were labelled "Mafia", "Evil", and "Guilty".
Six weeks before the takedown he was approaching real legitimacy by aligning himself with Hollywood and music stars who appeared in a Megaupload music video which went viral. Puff Daddy, Alicia Keys, Snoop Dogg, will.i.am, Macy Gray and others literally sang the praises of Megaupload. When the infringement charges hit, many of them publically stated that they had not known of the company's business practices.
There is no turning back from revolution; the world has been irrevocably changed by information technology. Just like the telephone, television and car, the internet is not going away. It is why you are reading this in The Global Mail and not in a newspaper. As fast as Hollywood clamps down, shape-shifting Silicon Valley will invent, innovate and find other ways into uncharted waters.
"Really, in my opinion the government of the United States is protecting an outmoded, monopolistic business model that doesn't work anymore in the age of the internet," Dotcom told TV 3. To Hollywood he wrote, "The VCR frightened you but it ended up making billions of dollars in video sales.
"You get so comfortable with your ways of doing business that any change is perceived as a threat," he continued. "The problem is, we as a society don't have a choice: the law of human nature is to communicate more efficiently. And the economic benefits of high-speed Internet and unlimited cloud storage are so great that we need to plan for the day when the transfer of terabytes of data will be measured in seconds."
"Everybody knows that the Internet is being used to legitimate and illegitimate uses. I think every online provider has the same challenges that we have. YouTube, Google, everybody is in the same boat," Dotcom said to TV 3, adding: "There are a hundred companies out there [offering the same service]. Why has not something happened to them?"
Indeed, the entertainment industry worked with Megaupload to design the take-down system it had in place. Studios and Microsoft, he said, "180 partners” had their own tools to take down infringing material, could simply go in and remove the links. "We provided that voluntarily and they have removed over 15 million links."
In fact, a recent survey by the International Federation of the Phonographic Industry, which looked at 236 cyber-locker companies, found that Megaupload largely abided by the Digital Millennium Copyright Act of 1998, and removed illicit files on the demand of the copyright holder.
While nobody wants to take food out of the mouths of actors, musicians and writers (and journalists) who have become collateral damage in the war over ownership of this brave new world, nobody is going to stop downloading either. It is too fast and easy.
But movies cost many millions to make and profits are decreasing exponentially as people stop going to movie theatres. The MPAA, which is comprised of the six major studios, says pirating costs its members USD6 billion a year. The MPAA argument found support in the New York Times, where Eduardo Porter editorialised: "If professional musicians, movie directors and writers can't make money from their art, they will probably make less of it. Independent producers say piracy is already making it harder to raise money for small and mid-budget movies. Stopping piracy is about protecting creativity, and the many occupations it supports — think pop band or sound mixer."
In an interview several years ago, the musician Sting told me that the days of making fortunes such as his from three-minute songs were gone, due to the digital age and music downloads.
But Dotcom believes Hollywood has caused its own problems, because of the way its licensing works: "They release [a film] first in one country but they show trailers to everyone around the world pitching that new movie. But then the 14-year-old in France can't watch it for six months, you know? If the business model [was] one where everyone has access to this content at the same time, you wouldn't have a piracy problem."
Rothken believes it's impossible to enforce international cyber regulations with a kind of separate cyber-government. "If such a thing were possible, it would take a long time. We do have some treaties like the Berne convention, which apply to intellectual property, but even getting some nations to agree to even the simplistic principles that are involved in the Berne convention was very difficult. The sovereignty of the different nations, their own legal systems and economic and social values provide some degree of friction for a holistic international law on these topics.
"For example if one were to try to create an international rule and you had a country like the US where the Hollywood lobby is very powerful, they would want to make the rule in a copyright extremist kind of philosophy. But if you have another country where you don't have a large entertainment industry but a very important technology industry, they might want to take the side of fair use and free speech. So whatever the debate is going on in the United States would now happen on a more complex global field and that would create all kinds of political gridlock on an international level."
Dotcom is indefatigable in his righteous efforts to embarrass the US government.
He has a global audience on the Internet, and, now that he is unemployed, he has all the time in the world to devote to his own cause. He has stated that Hollywood power players, those generous donors to Democratic campaign coffers, influenced Joe Biden into ordering the Megaupload take-down without legal justification.
Always an ebullient communicator, Dotcom has put a song titled Mr President, on his website, which accuses Obama of "turning innovation into crime". Dotcom says it had 500,000 hits in the first week.
And his rap song, Amnesia — which refers to the New Zealand politician John Banks, who distanced himself from the Dotcom drama, "forgetting" he had asked Dotcom for campaign donations to be made 'anonymously' and that he had, in fact, received NZD50,000 — achieved its goal of making Banks look exceedingly stupid.
Six months in and Dotcom's barrage of freedom fighting messages is making US Agencies look like bullies and the case against Dotcom and Megaupload appear flimsy; in June, New Zealand's courts ruled that the warrants for the raid and seizures lacked sufficient detail and were illegal.
Sean Kalinich, writing for DecryptedTech.com, outlined how the case against Megaupload was failing: "The FBI also might have known that what they were doing was not legal in New Zealand as they rushed to get copies of the evidence back to the US to avoid any complications that might arise from needing to follow anything like the law. Instead they took everything [the hard drives] in the hopes that they would find something to support their claims. The fact that the FBI has not brought any evidence out makes us wonder if their fishing efforts were in vain."
In order to have Dotcom extradited, the US Department of Justice will have to prove to the New Zealand courts that Megaupload deliberately infringed copyright. Given that the entertainment industry had access to his site to delete offending material, this is not going to be easy. If the New Zealand courts rule that Dotcom cannot be extradited, then the case cannot go ahead in America.
Steve Wozniak, co-founder of Apple, visited the Dotcom mansion in June; he has this to say on the matter of piracy: "I am totally against people trying to get things for free that were created by creative people. I have close connections in the music industry, most of my best friends have some connection to the music industry. I am involved with film. I am involved with television. Basically their material should not be stolen." But he believes that going after Dotcom was like closing down a post office because people are mailing drugs.
"And I look at the Government and their phony charges, the fact that they won't let him use his assets to pay his lawyers. They give him a cost of living [allowance], but not the cost of his legal defence. That is just totally unfair … You only want an unfair advantage when you are in the wrong; that is when you seek the unfair advantage — 'cause you think you need it."
Ziad Batal, a television producer who met with Dotcom in Hong Kong last year, was left in no doubt that the man's ambition was as outsized as he is. "The vision was very clear. He wanted to be the biggest entrepreneur in the Internet world," Batal toldThe Hollywood Reporter.
In 2001 Dotcom won the Gumball 3000, a 4,800-kilometre car race on public roads around the world, in a $450,000 modified Mercedes. He had a private jet follow the course, carrying mechanics in case he needed repairs, Gumball CEO Max Cooper told The Hollywood Reporter. "Sometimes he'll do anything to achieve those big goals and on more than one occasion is prepared to overstep the mark." The computer-driven Mercedes that he customised for this race was way ahead of its time.
Cooper travelled with Dotcom and a huge entourage to the South of France on the 80-metre super yacht Golden Odyssey. During the journey, meals onshore were paid for from suitcases of cash. Cooper described Dotcom to The Hollywood Reporter as, "quite quiet and reserved. Even when hosting a party, he's far more comfortable sat [sic] watching it from afar in a control room than being the life and soul of the party".
The battle is far from over. The Megaupload case will change the way Internet law works for decades to come. In Australia, members of the Pirate Party plan to run as independents in the ACT election, campaigning on an easing of the piracy law.
Ira Rothken believes that the Internet is not out of control and that this situation can be resolved without scare tactics. "The evolution of the Internet is a community discussion. At the core of a vibrant economy you would like to have a thriving entertainment industry and a thriving technology industry."
The persecution of Kim Dotcom may go some way to clarifying the urgent necessity for that community discussion.
In the meantime he just wants his stuff back.