It seems likely that anyone who is interested in intellectual property and the internet would be familiar with the events which took place last Thursday just outside Auckland, New Zealand, involving a dramatic raid on ‘Dotcom Mansion’ (pictured), the arrest of Megaupload founder Kim Dotcom (nee Schmitz), and the seizure of various allegedly ill-gotten gains, including guns, millions of dollars in cash, and luxury cars worth around US$5 million. If not, there is plenty of coverage to help you get up to speed, such as New Zealand Arrests Over Megaupload Shutdown and Kim Dotcom: Megaupload Founder Arrested In New Zealand from the Huffington Post.
Predictably, there has been a huge outcry from opponents of internet censorship, blaming everyone from the Hollywood movie studios, to an overzealous US Department of Justice, the US government, the FBI, the New Zealand authorities, and anyone else with a vested interest in not having their copyright works ripped off and distributed for free throughout the internet.
But if all of this ends badly for freedom on the internet – and it is entirely possible that, one way or another, it will – in my opinion the blame should be laid squarely at the feet of those actually responsible for the current situation, i.e. Kim Dotcom and his fellow principals at Megaupload.
THE THREAT TO ONLINE FREEDOMThere are two arguments generally put forward as to why the Megaupload indictments represent a threat to freedom on the internet. The first is simply that they are somehow indicative of the power of copyright-owning lobby groups who will stop at nothing to stamp out illegal file sharing, and do not care how much collateral damage they cause in the process.
This amounts to an expression of disillusionment in the democratic process, however last week’s protests against the US Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) demonstrate that democracy is alive and well in the internet age, and that elected representatives can be made to hear the voice of the people, if they shout loud enough.
The second argument is, in my view, more subtle, but also of greater validity. It stems from the fact that when the authorities become aware of someone possibly being involved in illegal activity, there is nothing they can do about it without first building a case. This involves identifying laws that are potentially being broken, and then building up the evidence to support the allegations of illegal conduct.
The purpose of a law relating to criminal conduct is to draw a line between legal and illegal activities. In ideal world, the line would be sharp and bright. None of us would be in any doubt as to what is ‘allowed’ and what is ‘forbidden’.
Of course, we do not live in an ideal world. And in the real world, there is always an element in society which deliberately operates at the boundaries of legal conduct, trying to gain financial benefits comparable to those available outside the law, while avoiding the risk of prosecution. This is commonly observed in relation to tax laws – most of us are fairly conservative, and stay well within the law, but there is also no shortage of people willing to dabble in various dubious investment schemes in order to further reduce their tax bills.
And, based on the content of the 72 page US Department of Justice (DoJ) indictment, it seems that whatever else Dotcom and his team may have been, they were not ignorant of the law.
The issues that this raises have been well summarised by Techdirt’s Mike Masnick in his article Megaupload Details Raise Significant Concerns About What DOJ Considers Evidence Of Criminal Behavior. I disagree with Masnick that the indictment has anything to do with evidence – which is something separate that the DoJ will need to bring forward at trial in order to prove their case – but this is probably just semantics, and certainly the indictment raises concerns about where the dividing line is between legal and illegal conduct, and the impact this case may have upon the future powers of copyright holders to deal with alleged online infringements.
Masnick notes that a number of the elements of the DoJ case could be interpreted as the legitimate actions of someone endeavouring to comply with the law, rather than the duplicitous actions of someone attempting to conceal illegal activities. These include the absence of a site search feature on Megaupload, the automatic deletion of files that have not been accessed for a period, and not listing infringing content in ‘top downloads’ lists. All of these are features of many reputable sites, and have been found in the past to mitigate against liability by operators for infringing activities of their users.
There is a third interpretation, which is that Megaupload’s actions could have been deliberately taken in an attempt to stay within the letter of the law, while all along flouting its spirit for financial gain. In any case, I suspect that Masnick’s article will prove to be a template for Megaupload’s defence when and if the matter comes to trial.
The risk, of course, is that if a court finds against Dotcom and Megaupload on any of these individual issues, it has the potential to create a precedent and a new basis for copyright holders to take action against the operators of sites carrying allegedly infringing user content. And this could be the real threat that the Megaupload case presents to the internet.
BLAME THE CRIMINALS, NOT THE POLICE!The DoJ indictment alleges that Megaupload has generated more than US$175,000,000 in income, and caused over US$500,000,000 in harm to copyright holders. It further alleges that in 2010 alone, Kim Dotcom personally received over US$42,000,000 from the activities of Megaupload.
However rubbery these figures may be in reality, there is no doubting the size of the Dotcom mansion, or that Dotcom has become a very rich man from Megaupload.
Now if (and these are still allegations, at this stage, of course) this massive wealth has come substantially as a result of rampant copyright infringement on the Megaupload and related sites, and if Dotcom and the other company officers were well-aware of this fact, and if the manner in which they operated the sites was intended to immunise them against liability and prosecution, then the rest of us who actually have to work to earn a far more modest living should be cheering on the sidelines to see these abusers of technology and the law brought to justice!
The fact that many are not perhaps proves only how blinkered some have become, in pursuance of their own self-interest, to the interests of others. Copyright holders are people too, and most of them are not Rupert Murdoch!
Unfortunately, as far as I can see this case has only two possible outcomes, and it may be that neither of them would be good for freedom on the internet. If Dotcom and his Megaupload colleagues are found guilty, it will almost certainly result in some degree of further restriction to the legal defences available to operators accused of liability for their users’ infringements. But if they are not found guilty, it will only strengthen the resolve of those who believe that existing laws are not strong enough, to push through even more draconian laws, such as SOPA and PIPA.
And if either of these outcomes eventuates, it will not be the fault of copyright holders with legitimate concerns, or authorities acting on those concerns. The blame will lie squarely with those who have sought to exploit the blurry boundaries of legality for their own enrichment.
A BLUNT INSTRUMENTLast week I wrote about the plight of young British man Richard O’Dwyer, who is facing similar extradition proceedings in the UK as those Dotcom and his co-accused will now face in New Zealand (see UK Court Allows Extradition of Alleged Copyright Criminal). Morally and technically, the magnitude of O’Dwyer’s offences in setting up a linking site are miniscule compared to the scale of Megaupload’s file hosting activities. The same can be said for the relative financial gain obtained. And yet both find themselves in substantially the same position.
The authorities in all countries involved may well just be doing their jobs, but it is clear that copyright law is a very blunt instrument for the task. It is difficult for people to feel that the law provides an appropriate balance between different interests when it is unable to distinguish between a person such as Richard O’Dwyer and an operation like Megaupload.
The law will never be perfect. However the authorities could, if they so wished, show a little more discretion in its deployment. Failure to do so can only result in respect for the law being further undermined. And that is a bad outcome for everyone.