Kim Dotcom: New Site Is Legal, 'Fresh Start,' Not Revenge on Hollywood

Kim Dotcom Mona Schmitz Leaving court - H 2012
Fairfax Media/Getty Images

Kim Dotcom Mona Schmitz Leaving court - H 2012

"We'll reserve final judgment until we have a chance to take a closer look," but "count us as skeptical," the MPAA says about Mega.

SYDNEY -- Indicted Internet entrepreneur Kim Dotcom formally unveiled his new file-sharing and cloud storage service Mega during a news conference from his mansion near Auckland, New Zealand, arguing that it is legal and made possible because of the shutdown of Megaupload.

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"This fresh start for Mega is a good thing,” the Germany-born Dotcom said during Sunday's news conference, which was live streamed ahead of what was billed as a lavish Sunday launch party for the new site at his mansion.

He even argued that the downfall of his former website Megaupload made the new site possible. "It wouldn't have even been possible to do this," news organization Fairfax NZ quoted him as saying. "No one else who is currently in business in the file-storage arena can just update their site and be like us; you have to start from scratch."

In an interview with Reuters, meanwhile, Dotcom emphasized that the site launch is not meant to be revenge on Hollywood or U.S. authorities. "This is not some kind of finger to the U.S. government or to Hollywood," he said.

And he added: "Legally, there's just nothing there that could be used to shut us down. This site is just as legitimate and has the right to exist as Dropbox, Boxnet and other competitors," he said in reference to well-known cloud-storage services.

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At one point during his Sunday press conference, Dotcom even said his goal was to list the new business, which uses the company name The Privacy Co., on the New Zealand Stock Exchange.

The Motion Picture Association of America, which claims copyright infringement by Megaupload, remained skeptical ahead of Mega's launch.

"We are still reviewing how this new project will operate, but we do know that Kim Dotcom has built his career and his fortune on stealing creative works," the MPAA said in a statement cited by Fairfax NZ. "We'll reserve final judgment until we have a chance to take a closer look, but given Kim Dotcom's history of damaging the consumer experience by pushing stolen, illegitimate content into the marketplace, count us as skeptical."

The Mega site launched Sunday morning New Zealand time, and within several hours more than 250,000 users had registered, according to Dotcom. As the site went live, he tweeted: "As of this minute one year ago #Megaupload was destroyed by the US Government. Welcome to”.

Dotcom and several associates were arrested during a raid on his mansion in outer Auckland a year ago on charges of racketeering, copyright infringement and money laundering. The charges said that Doctom’s then-website, Megaupload, enabled Internet piracy and illegal downloading through its file-sharing service.

Hearings about a possible extradition to the U.S. are due to be heard in March in New Zealand. Dotcom said Sunday he was hoping to stay in New Zealand if the extradition proceedings fail.

"My biggest fear is if we succeed, will there be an end -- will that be enough to say, 'OK, we made a mistake, leave this guy alone,' or will the people in government and the senior people in law enforcement take this defeat and be bitter about it and try and find something else?” he told the news conference.

The new Mega site has been designed by Dotcom and Mathias Ortmann, Bram van der Kolk, and Finn Batato, Dotcom’s co-accused in the Megaupload case, while industry veteran Tony Lentinos serves as the CEO.

THR COVER: Megaupload's Kim Dotcom: Inside the Wild Life and Dramatic Fall of the Nerd Who Burned Hollywood, like Megaupload, allows users to store and share large files, providing registered users with 50 gigabytes of free storage. The key difference is an encryption and decryption feature for data transfers. The decryption keys for uploaded files are held by the users, not Mega, which means the company can't see what is in the files being shared. Dotcom therefore can argue that Mega can't be held liable for content it can not see, according to Fairfax NZ.

"Even if we wanted to, we can't go into your file and snoop and see what you have in there," the company says in an online introduction. “We are a dedicated group of technologists who were given the time, opportunity and Internet access to build an awesome cloud storage service that will help protect your privacy. We have programmed this Internet service from scratch in Auckland, New Zealand. Unlike most of our competitors, we use a state-of-the-art browser-based encryption technology where you, not us, control the keys.”