Megaupload founder faces NZ court this week

Kim Dotcom swimming with his daughter Kaylo at a pool party at his mansion in Auckland last year. The US says Dotcom and three co-accused Megaupload executives cost US film studios and record companies more than US$500 million by encouraging paying u
Kim Dotcom swimming with his daughter Kaylo at a pool party at his mansion in Auckland last year. The US says Dotcom and three co-accused Megaupload executives cost US film studios and record companies more than US$500 million by encouraging paying users to store and share copyrighted material.PHOTO: REUTERS

Hearing to decide whether to extradite Kim Dotcom to US to face charges over copyright

WELLINGTON/SYDNEY • Nearly four years after dozens of black-clad police rappelled into his New Zealand mansion and cut him from a safe room, flamboyant German tech entrepreneur and would-be hip-hop star Kim Dotcom may finally be about to face the music.

A New Zealand court hearing starting today will determine whether he will face charges of copyright infringement, racketeering and money laundering in the United States related to the Megaupload file-sharing site he founded in 2005.

Well known for his hip-hop-inspired photo shoots with scantily clad women and luxury cars, Dotcom had assets including computers, art works, a pink Cadillac and bank accounts holding millions of dollars frozen after the 2012 raid in the hills outside Auckland.

The US says Dotcom and three co-accused Megaupload executives cost film studios and record companies more than US$500 million (S$700 million) and generated more than US$175 million by encouraging paying users to store and share copyrighted material such as movies and TV shows.

"The US... took down the entire Megaupload site, went ahead and froze all their assets and did this with great publicity and public fanfare and did it in coordination with the very powerful force in the United States, from Hollywood," said Dotcom's lawyer Ira Rothken.

"We feel as though Kim Dotcom... will not have a fair procedural playing field because he won't have any assets with which to mount a defence for the largest copyright case in history."

Thumbing his nose at the US authorities, Dotcom set up a new cloud storage company called Mega after being bailed, but has since distanced himself from it.

Today's hearing will be closely watched by developers working in the grey areas of the law prevalent at the Internet's cutting edge for signs of how far Washington is willing to go to protect US copyright holders, said Mr Tom Pullar-Strecker, who covers technology for Fairfax Media in New Zealand.

"You just have to look at what the US has achieved already through this action. Kim Dotcom's business, Megaupload, has been destroyed really through simply taking the action," he said.

Megaupload accounted for about 4 per cent of total traffic on the Internet in its heyday as users stored and shared files containing wedding videos to Hollywood films.

Since his arrest, Dotcom, a German national and New Zealand resident, has been barred from leaving the country or venturing more than 80km from his mansion, and is required to report to police twice a week.

The extradition hearing today will open with procedural arguments before getting down to the real substance from Thursday.

The prosecution must prove that a crime was committed in both the US and New Zealand in order to trigger an extradition treaty between the allies.

In an opinion submitted in support of Dotcom, Harvard law professor and copyright expert Lawrence Lessig argued that Washington's case does not meet those requirements.

"An attempt has been made to extract facts from multiple sources and over a wide span of time, to organise a large number of otherwise disconnected facts by using systematic phraseology and to juxtapose phrases in order to create an impression of coherence and substance," he wrote. "However, the attempt fails to reach its goals."

A spokesman for the New Zealand Crown Law service declined comment.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on September 21, 2015, with the headline 'Megaupload founder faces NZ court this week'. Print Edition | Subscribe