Forum: Sympathy for the devil

Michael Foreman examines the disturbing implications of the Megaupload case

I’m sure more than a few Computerworld readers will share my sense of unease about the recent events surrounding the file storage site Megaupload, its founder Kim Dotcom and the other alleged copyright infringment conspiracists.

My own misgivings began when I attended a press conference held at North Shore Police heaquarters on the day of the raid on the Dotcom mansion.

When asked how the raid had played out, detective inspector Grant Wormald replied: “It’s fair to say that the operation was a success.”

In some ways that is true, in that the four accused were apprehended before they could interfere with any evidence, without any injuries to themselves or to the police officers concerned.

But as more details of the raid emerged - which involved 76 police officers including members of the Armed Offenders Squad, and two helicopters – it all started to seem a bit out of proportion. I don’t remember helicopters or the AOS being used in the South Canterbury Finance case for example.

Is this level of response “the new normal” in white collar crime cases or was it influenced by the presence in Auckland of four FBI officers?

Much more disturbing is the apparent ease with which essentially private US interests have managed to mobilise the full might of the US Department of Justice, the FBI, and through them, our own Crown prosecutors and the New Zealand police.

Again, is this apparently frictionless co-operation with the US the new normal? What would happen if an internet-related extradition request arrived from say, China or Iran?

According to an FBI press statement, the investigation of Megaupload began in 2010. Yet documents produced by prosecutors at North Shore District Court include the transcript of an alleged chat session on Skype between two of the defendants that dates back to 2007.

The question that I keep asking myself is why on earth the US copyright holders didn’t sue Megauploads? The standard of proof required is much lower in civil actions and settlement would be likely to be reached out of court.

According to reports, Megaupload has already indicated it would be willing to share its revenue with the copyright owners in a similar fashion to the way YouTube does.

Instead, Dotcom and six others have been charged with racketeering, money laundering and criminal copyright infringement. If the copyright infringment charge fails to stick, then the make-weight racketeering and money laundering charges will fall over and any assets seized will eventually have to be returned.

It’s worth pointing out that the current maximum sentence for copyright infringement in New Zealand, under the Copyright (Infringing File Sharing) Amendment Act (which itself is considered draconian by some) is a fine of $15,000. The maximum penalty under the Copyright Act is a prison sentence of up to five years.

But if Dotcom and the rest are successfully extradited and convicted of copyright infringment, which also carries a maximum sentence in the US of five years, the racketeering and money laundering charges could each earn the accused a 20-year stretch. Under US law these sentences can be applied consecutively, resulting in a sentence possibly totalling 55 years. That would be a sentence that is unheard of in New Zealand for any crime, including murder.

In an interview with Computerworld InternetNZ CEO Vikram Kumar questioned how people would feel if a teenager was treated like Dotcom and his co-accused have been. I for one, wish that scenario was as far-fetched as it first sounds.

There are a couple of more pressing questions that need to be answered in the wake of the Megaupload affair.

First, exactly how far does the US writ extend into the cloud and have small countries like New Zealand already lost their sovereignty when it comes to internet issues?

Second, what are the implications for legitimate users of file storage services such as Megaupload - will such users ever get their get their files back, or is this a non-issue for the prosecuting authorities?

For the rest of us, should we ever trust the cloud to safely store our valuable digital property again?