The notorious Megaupload.com was shut down by prosecutors in Virginia early in 2012 and the service’s founders were then charged with violating piracy laws, after it was alleged that the site had cost record labels and film studios more than $500 million in lost revenue (quite how these figures are quantified is never very clear).

Megaupload.com allowed users to upload and share content freely and, therefore, they were to blame if people used the service to breach copyright. Despite any potential flaws in that argument, it has been reported that, at one point, Megaupload.com was the 13th most visited website in the world.

However, clearly not perturbed by the shut down of Megaupload.com, the site’s founder, Kim Dotcom, formerly known as the more conservative “Kim Schmitz”, has announced plans for a new service called ‘Mega’.

Mr Dotcom unveiled the new plans on Twitter, and claimed that the holding site was already getting “millions” of hits. Interestingly, he claims that a large number of the visits were in fact from US authorities, and as a consequence, the site’s administrators were able to view the authorities’ IP addresses.

Mega is expected to be launched on 20th January 2013, which happens to be a year to the day since Mr Dotcom was arrested. It is suggested that the site will use encryption methods which should mean that only users will be aware of what they are uploading, and administrators of the site will not be able to see who is uploading what. In doing so Mr Dotcom believes that the site would therefore not violate any US laws.

He is quoted as saying, “The new Mega avoids any dealing with US hosters, US domains and US backbone providers and has changed the way it operates to avoid another take down”. Furthermore, a message on Mega’s holding page reads, “The new Mega encrypts and decrypts your data transparently in your browser, on the fly. You hold the keys to what you store in the cloud, not us.”

Mr Dotcom currently resides in New Zealand. His mansion there was raided by local authorities at the start of 2012, in a raid which a New Zealand court later ruled to be illegal. This small victory is however not the end of the legal battle for Mr Dotcom, as it will be decided in March 2013 whether he should be extradited from New Zealand to the USA to face charges relating to copyright theft. If extradited and subsequently convicted, he could face up to 20 years in prison.

It will be interesting to see how popular the new Mega will prove to be, now that it appears to shift responsibility for the sharing of any unlawful content on to the users, as opposed to the site’s owners.

This is a similar argument to the “mere conduit” defence that a European site could potentially use. In effect, not knowing who is accessing what through your servers could provide a defence. Obviously, “wilful blindness” would not.

Whether Kim Dotcom was aware of what was going on is unclear. However, thousands of MegaUpload users complained following the takedown that they had lost legitimate material that they had stored on the servers. Clearly, it was not all material in breach of copyright. Identifying quite what was and what was not infringing material is obviously too hard a task for the authorities to take on. What hope Dotcom then?

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