Home opinion-and-analysis Beer Files Kim Dotcom joins the freedom brigade

Kim Dotcom joins the freedom brigade

And then there were four. While the names Manning, Assange and Snowden are raising hackles in political power circles, Internet entrepreneur Kim Dotcom is having the same effect among the corporate elites.

Some may argue that these days the corporate and political establishments are one and the same. After viewing Kim Dotcom’s own recently released YouTube video of the raid on his home in January 2012 and watching his interview with Ticky Fullerton on the ABC yesterday, it is hard to argue otherwise.

In case you missed all the fuss last year, Kim Dotcom (who changed his name from Kim Schmitz in 2005) is a German born resident of New Zealand who founded a file-hosting site called Megaupload.com in 2005. Aside from hosting files, Megaupload’s sites enabled users to upload videos, music, pictures and had a music streaming service.

By the time it was shut down by the FBI in January 2012 Megaupload.com was the 13th most visited site on the Web with 50 million visitors a day and 180 million registered users. Funded by advertising, the site made Kim Dotcom a multimillionaire.

This, however, made certain powerful interests, especially the US movie moguls, whose content was continually being uploaded by users, very unhappy. So they continually issued take down demands (like they do with YouTube) and, as is the case with YouTube, Kim Dotcom’s company complied with the demands. “We would take down videos within 3 hours of receiving a notice even though we had 24 hours,” Dotcom said in his interview.

According to Dotcom, Megaupload also supplied movie studios with direct access to his site and provided them with tools to enable them to take down copyright infringing material themselves.

So, absent of any other evidence of wrongdoing, Megaupload.com would appear to have been operating very much like YouTube and with a similar business model. In fact, it could well have become a serious competitor to YouTube. However, unlike YouTube, Megaupload was not owned by Google. If it had been, it’s a fair bet that what happened next would never have taken place.

The US Department of Justice requested (ordered?) the New Zealand Police to raid Kim Dotcom’s mansion and seize all of his records and assets, accusing Dotcom of racketeering and money laundering. The raid was like something out of an anti-terrorist action movie, involving helicopters and armed sharpshooters with sighted weapons. Kim Dotcom and his three co-workers were led away in handcuffs.

Yet one could imagine that if an ordinary constable simply knocked on the door, served a warrant and asked Kim Dotcom to accompany him to the local cop shop to answer some questions, he would probably have complied. However, these days it seems that the best way to make a person appear to be a guilty criminal is to put on a show and lead him away in shackles.

Aside from the raid, which illegally confiscated all of the assets of any value in Kim Dotcom’s rented home, including his cars (which have since been returned), Kim Dotcom was held in jail for more than a month until, after much legal wrangling, he was finally granted bail, after all of his company’s tens of millions of dollars of assets were frozen and he was no longer considered a flight risk. Meanwhile, as is its usual style the US DOJ has filed an extradition request with the New Zealand Government.

To date, 18 months after its ordered raid, the US DOJ has not brought the case against Kim Dotcom to trial and the agency has pushed back the case, which was to have been heard in August, until March 2014. “This is because they know they do not have a case against me,” said Dotcom. “They have frozen my assets so their tactic is to dehydrate me so that I don’t have the funds to defend myself.”

To his credit, Kim Dotcom is not taking the matter lying down. He has relaunched a new cloud storage site called Mega (mega.co.nz) that enables users to store encrypted files. He believes the revelations of PRISM will help make his new service a huge success. He also hopes to raise money for his defence from a patent that he holds for double sign-on authentication that he invented in 1997 and which is currently being used by companies such as Apple and Google.

As the Kim Dotcom experience serves to illustrate, there is very little difference these days between power elites in government or corporations. If you cross Hollywood, you may as well be crossing the DOJ, DOD or the IRS.

US movie and entertainment interests are very powerful and they are very selective of their targets in an effort to protect their increasingly fragile business model in the Internet age, where information is shared freely. Most of us remember all too clearly when Big Entertainment ignored the too powerful Telstra and Optus, targeting instead Australia’s 3rd largest broadband provider iiNet.

It was a blow for freedom and common sense when iiNet eventually prevailed in that case. In a fair and free world the same should hold true for Kim Dotcom. However, as we have seen with Manning, Assange and Snowden, the world as it stands is neither free nor fair.


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.