Dotcom boom: Mega launches with a bang

21-01-2013, the successor to file-sharing site Megaupload, launched on Saturday with a spectacular display on founder Kim Dotcom’s estate in New Zealand.

The launch date of January 19th marked the anniversary of US authorities shutting down Megaupload and arresting Dotcom for conspiracy to commit copyright infringement.

Like its predecessor, Mega will allow users to upload and share files, and now offers 50GB of free storage using cloud-based technology.

Dotcom claims that by exploiting a loophole in US copyright laws, the new site will be free from the threat of criminal prosecution.

Mega will use ‘User Controlled Encryption’, a system that issues each file a unique decryption key that only the file holder can control.

As the site administrators cannot review files without their assigned decryption key, Dotcom claims they cannot be held responsible for any pirated content Mega may be hosting.

Gina Durham, partner at DLA Piper in Chicago, said that encrypting the files so they are invisible to site administrators, or exercising wilful blindness, does not guarantee Mega’s protection. She said: “If you're encrypting [files] to make yourself blind to the fact that there may be infringing material on your service, you will not necessarily be excluded from having liability in the US.”

She added that US rights holders may have basis for litigation if they are being injured by the site, or if the site is having an impact on US commerce.

A quarter of a million users registered to Mega within two hours of the launch, with more than a million visits made to the site in its first 14 hours.

Megaupload originally launched in 2005 as a way for users to share large files. The US government shut it down last year after complaints from the Motion Pictures Association of America because of the large quantity of pirated material available on the site.

US authorities are still seeking extradition of Dotcom from New Zealand to face charges of copyright infringement, money laundering and racketeering.

Meanwhile, head of anti-piracy group StopFileLockers (SFL) Robert King has announced plans to curb Mega’s growth by cutting off its cash flow.

Mega uses resellers like the Melbourne-based Instra to process user payments for extra media storage. SFL has launched a campaign to terminate these payment processing systems, maintaining that Mega is not a “legitimate” site.

SFL said in a statement on its website: “We will begin working from today to ensure that no reseller of Mega is able to process payments through Visa, Mastercard or PayPal.”

This article was first published on 21 January 2013 in World IP Review

megaupload, mega, Kim Dotcom, file-sharing

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