Dotcom's return: legally naive or Mega clever?

Kim Dotcom paints his new site, Mega as being impenetrable to any legal complications. So does privacy and encryption trump copyright or is it all just talk?

He’s had his mansion raided by police, been confined to house arrest and he may be about to be extradited to the US to face copyright infringement charges.

You would think that any of these experiences - not to mention the cascade of expensive lawsuits - would be enough to force New Zealand internet tycoon Kim Dotcom into an early retirement.

But alas, the trials and tribulations that have plagued Dotcom over the past year have seemingly only hardened his resolve

Now, as if he’s a glutton for legal punishment (or the limelight), Dotcom’s returned with a new version of the very form of internet service that got him in trouble in the first place. He’s launched a content sharing site named Mega.

Simply put, content sharing sites allow you to share movies, music and even games with anyone across the net. They’re a haven for internet users wanting to find their favourite media for free and a nightmare for content producers trying to make money from their work.

Despite his past mishaps, Dotcom insists that history will not repeat itself with Mega.  The billionaire's banking on the power of one word: privacy.

Files that are loaded onto Dotcom’s new website are encrypted to the point where not even he can determine what has been uploaded. Dotcom says that if he doesn’t know what’s being put on his site, he’s technically not liable for any copyright infringements that are taking place on it.

"Legally, there's just nothing there that could be used to shut us down. This site is just as legitimate and has the right to exist as Dropbox, Boxnet and other competitors," Dotcom told Reuters, mentioning other cloud storage services.

Dotcom’s comments paint his new site as being impenetrable to copyright complications. He’s also cheekily offered to help content producers stamp out copyright infringement on the site... if they can find it.

So has Dotcom found the silver bullet that will stifle copyright litigators or is this just talk?

For two Australian copyright experts, Mega is simply another example of Kim Dotcom doing what he does best: talking up a product.

“His implication that privacy trumps all is simply nonsensical,” University of Canberra law lecturer and copyright commentator Bruce Arnold says.

Arnold says that Mega is a “gift” to PhD students and lawyers, who will now pore through existing copyright legislation and try to find a way around Kim Dotcom’s “privacy” block.

“Some of his claims... lovely comments like ‘this is putting pants on the internet’... well, if you are putting pants on the internet, well then Australian law and the laws of all the other developed economies can certainly ask you to empty the pockets,” Arnold says.

Arnold explains that if Dotcom has any level of control over Mega, then the courts - more than likely the US courts due to their laws and previous vigour in pursuing Dotcom - will again find a way to pin any form of piracy on the tycoon.

“And if Mega can’t be effectively addressed using current law, than laws will be passed to deal with the problem," Arnold says.

“Who wins in copyright litigation? It’s always the lawyers."

On the flipside, there will certainly be a long list of losers if Mega’s privacy defence doesn’t stand up to the law. Around 500,000 users registered for Mega’s service within 14 hours of its launch, and given its predecessor's ( reputation for piracy you can bet than many of them are already illegally sharing content online.

To further complicate matters, speculation is emerging around the actual security of the encryption on Mega and hacker collective Anonymous is inferring that Dotcom’s true motive behind the site is to lure in and offer up key internet piracy figures to the FBI.

Whether Mega will spark a copyright legal feud similar to what we saw with the Optus TV Now case is yet to be seen. But both Arnold and his University of Canberra colleague Nigel Phair, the director for the centre of internet safety, agree that as it stands the site is not new or significant enough to change Australian law. In other words, Mega’s not new, groundbreaking, law-shattering technology - it’s just Megaupload 2.0.

Despite its legality, Phair believes that the launch of a new service like Mega won’t actually trigger an increase in online piracy in Australia.

“We have a certain demographic that’s willing to pay online and a certain demographic that’s not,” he says.

While Phair estimates that the amount of people on the web who are willing to pay is growing, he acknowledges that illegally downloading digital content is simply: “human nature for some people.”

And while this demand exists, Phair argues that there will always be some form of service available to cater to it.

“The counter-argument is that movie and music industries need to change their business models,” Phair says.

And that’s a point that Kim Dotcom, the so-called king of internet piracy, has been arguing all along.

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