Digital Legal MegaUpload Timeline

Dotcom says he could sue US government for $2.6 billion

By | Published on Monday 26 November 2012

Kim Schmitz

MegaUpload founder Kim ‘Dotcom’ Schmitz has threatened to sue the US government after the revelation that some of the pirated content listed as being on his former company’s servers by prosecutors had been left there at the request of the American Department Of Justice.

MegaUpload, of course, was shut down at the start of the year by the US authorities amidst allegations of money laundering, racketeering and copyright infringement against the company and its management, four key members of which, including Dotcom, are living in New Zealand and are currently fighting efforts to extradite them to America.

Amongst other things, prosecutors claim that MegaUpload operated a deliberately shoddy takedown system for removing copyright material once made aware of it, whilst also encouraging users to upload unlicensed music, movies and TV shows, because doing so ensured the wider Mega platform had a constant supply of popular content, driving traffic, ad sales and subscriptions, even though rights owners were never paid a penny.

But Dotcom and the Mega team insist their company operated within US copyright law, removing unlicensed content in line with America’s Digital Millennium Copyright Act. And even more than that, it was revealed earlier this month that the company itself occasionally assisted the DoJ when it was investigating other companies accused of piracy which stored and distributed illegal content via the Mega platform.

One such piracy operation was NinjaVideo, and, now say Mega’s legal team, some of the content prosecutors have listed in their case against Dotcom actually belonged to that venture, and was not deleted by MegaUpload because of a request from the DoJ, which wanted the unlicensed files to remain accessible while it continued to investigate Ninja’s activities.

According to reports, prosecutors say that’s no excuse, because some of the content stored in NinjaVideo’s locker on MegaUpload was also available elsewhere on the Mega platform, and, now knowing for certain that that content was unlicensed because of the Ninja investigation, the digital firm should have removed the additional copies. But Mega’s lawyers say that their clients were cautious of doing platform-wide deletions of that content, in case it impacted on the NinjaVideo content that formed part of the DoJ’s case.

Quite how relevant the NinjaVideo content is to the wider MegaUpload case isn’t clear, but that didn’t stop Dotcom telling his Twitter followers that the DoJ was “a gang of rogue US attorneys out of control”, before revealing that he’d been advised: “We can sue the US govt or MPAA members for $2.6 billion in damages for the destruction of our businesses”.

Although access to MegaUpload’s fortune has been frozen since the US government shut down the Mega business in January, Dotcom says he soon hopes to have financial backing to allow a lawsuit against America.



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