TB&I talks to Mega CEO Vikram Kumar about how the offspring of the notorious cyberlocker aims to keep file-sharing above board.
On January 19 2012, the US Department of Justice shut down file-sharing website Megaupload and arrested its founder Kim Dotcom, along with three of his colleagues, on charges including conspiracy to commit copyright infringement and racketeering.
The Hong Kong-based Megaupload allowed Internet users access to millions of pirated movies, television programmes and music, free of charge. According to estimates, it once reported 50 million daily visitors and accounted for 4 percent of global Internet traffic. It is estimated to have cost copyright holders $500 million in lost revenue.
Mega.co.nz rose from Megaupload’s ashes earlier this year with a new image and focus on user privacy. It now has more than three million registered users who can upload and store files using an encryption system that keeps any infringing content invisible to the site administrators.
Can this measure protect the site from being shut down? How does Mega monitor activity on its site to ensure online piracy is kept to a minimum? Can file-sharing ever shake off its bad reputation? These are questions Vikram Kumar, Mega’s newly-appointed CEO, will have to consider.
Kumar admits he did worry about his own reputation when he took on the role of Mega CEO in February. “I didn’t accept the job straight away,” he says.
“It took me a month to get into the details, to meet up with Kim and the rest of the Mega team, and look at other opportunities too. But ultimately, I truly believe that Mega is a company that has the right intentions and the right potential.”
Mega operates from New Zealand, Dotcom’s adopted homeland where he remains under house arrest. His extradition hearing is currently scheduled for August, though Kumar is optimistic about the outcome.
I don’t think the allegations will stand up,” he said. “There is no evidence so far that has been put forward to warrant the team’s extradition, even though the US government has been invited by the New Zealand courts many times to provide it.”
The Mega team is evidently being very careful to ensure the site doesn’t suffer the same fate as its predecessor. Branding itself ‘The Privacy Company’, its focus is less on sharing, and more on security. Demonstrating its efforts to keep users secure, Mega offers a €10,000 bounty to users who find security-relevant bugs or design flaws in the site.
Before joining Mega, Kumar was CEO of non-profit Internet organisation InternetNZ. InternetNZ aims to keep the Internet ‘open and uncapturable’, allowing Internet users to build their own services online, unencumbered by rules laid out by governments and corporations, a vision Mega shares, Kumar says.
“At its heart, the Internet essentially is a communications network, it’s really simple— it’s almost beautiful in its simplicity. It allows people to innovate and to introduce new services without having to ask for permission.”
On his decision to join Mega, he says: “I felt that the aspects of privacy and sharing and collaboration on the Internet were not being well appreciated. I could certainly see a future in that,” he says. Internet users are increasingly keen to keep their personal details private, he says. “Some people are beginning to feel that they’ve had enough of becoming a product for people such as Google to market to advertisers.
"Demonstrating its efforts to keep users secure, Mega offers a €10,000 bounty to users who find security-relevant bugs or design flaws in the site."
“Organisations such as Apple and Facebook try to lock people into their own services—to some people Facebook is the Internet. I think that’s really sad because the strength of the Internet is being able to get a variety of services and sources of information.
“More business models are locking people and their data into a single silo which is where I think we’ve got some issues,” he said.
In an effort to maintain its users’ privacy, Kumar says, every file uploaded to Mega is encrypted, and a decryption key is assigned the file uploader. This hides the uploaded files from everyone—fellow Mega users as well as the site administrators. Only those who have the decryption key have access to the content, though uploaders may share their decryption keys with other Mega users if they wish, granting them access to the content.
Describing itself as a cloud storage provider, Mega is avoiding all the hallmarks currently associated with a cyberlocker, or file-sharing site. To this end, there is no search function for finding specific files stored in the service, though within two weeks of the site’s launch an independent Mega search engine emerged posting links to content provided by Mega users.
Commentators have accused the Mega team of exploiting a loophole in copyright laws in using the encryption service, to protect the site from being shut down. They claim that Mega is trying to avoid accountability for the content by being wilfully blind to it, though Kumar does not see this as the case.
“It’s a lot more complex and wider than that,” he says, disputing any claims that the encryption system constitutes wilful blindness on the Mega team’s part. Encryption helps Internet users to keep their privacy and control over the content they own, he says.
“Mega is providing encryption for everyone to use for their own information,” he says. “If they misuse that for infringing or for breaking the law, then we can take action against it after it comes to our attention.”
With a team of lawyers thoroughly checking the site’s infrastructure, Kumar is satisfied it does not break any laws. Regardless of the Mega team’s intentions, however, as long as users have complete control—‘you hold the keys’ says a statement on the site—some infringing content will inevitably find its way on to the platform.
“Any Internet service provided by anyone in the world has the potential to be misused, and really we should be focusing on people misusing services rather than the service itself,” he says.
“I think sharing is good,” he says. “We’d certainly encourage copyright owners to use a creative commons-type licence, for example, but it’s up to them.
“Copyright owners have a legal right to control the copies being created of public performances of their work. It is a property right that is enshrined by law. At the same time the same kind of law also balances the wider benefit of society, via the fair use doctrine.
“To me copyright is a balance,” he says.
How does the Mega team plan to tackle copyright infringement on the site, and if all files are encrypted, how can the team be aware of it?
“By law we are required to have a procedure for taking down files that are alleged to be copyright infringing,” he says. “There are other aspects where a law enforcement authority or a court can order Mega to take down infringing files, and Mega will absolutely cooperate with that.”
Copyright owners employ third parties to look for unauthorised sharing of copyrighted material as a Mega registered user, Kumar says. They report any infringing material to Mega by email or using a DMCA (Digital Millennium Copyright Act) form available on the site.
“That’s enough information for us to remove the file,” he says, adding that the take-down request must come from, or on behalf of, the copyright owner rather than the third party.
“The US government is twisting and extending the law into new and novel areas where the law was never intended to be in a way we call ‘legal overreach’."
As we go to press, Mega is in its fourth month of operation. So far, the team has not been contacted by any authorities with requests to shut down. “Hopefully they’ve been able to look at the website and accept that its compliance with the law is satisfactory,” Kumar says.
If the team is confident the site is not breaking any laws, would it consider operating the site from the US?
“We definitely do not want to have any cloud storage in the US,” he says. “The US government is twisting and extending the law into new and novel areas where the law was never intended to be in a way we call ‘legal overreach’. That’s not a very friendly environment for any Internet provider to be in.”
What does he make of the recent Carnegie Mellon University study that concludes legal movie sales and downloads in some regions increased by 10 percent since Megaupload shut down?
“I normally don’t comment on anything to do with Megaupload because I was never associated with it,” he says, adding that there have been different studies with different conclusions. “This particular study was funded by people who have a vested interest in the outcome,” he says.
Kumar envisions a future where Mega hosts a range of applications from its cloud storage platform, starting with an instant messaging service. But with half of his team awaiting extradition, and a prevailing appetite for free content, how does he rate Mega’s chances of survival?
“Mega will not only survive but do very well,” he says. “The Mega team’s intention is to provide a valuable service that the people will appreciate and use, so it’s not only entirely legal, it’s something that is actually quite welcome.
“At some point I expect we’ll have more of an enterprise focus—perhaps an application which companies can put behind their own firewalls and run that themselves. I think there’s a pretty good roadmap ahead—all of them with that privacy angle.
“Sharing is good, but obviously it has to be within a legal framework,” Kumar says. “The real issue is whether copyright law should be updated in an Internet age”.
This article was first published on 01 April 2013 in World IP Review
Mega, Vikram Kumar, Kim Dotcom, Megaupload, file-sharing