Kim Dotcom's New Venture Sounds Too Good to Be True

Mega sounds like a data hoarders dream: A new cloud-based storage site that offers 50 gigabytes of storage for free. For $39.95 a month, you can upgrade to the top tier plan that gives you four terabytes. That's enough space for about a million photos or 130 full-sized DVDs. On top of that, all of the your data will be encrypted so fiercely that not even Mega's tech team could figure out what you're storing without your private encryption key. The system even uses your unique keystrokes and mouse movements to add unpredictable randomness to the encryption. In other words, Kim Dotcom's new venture offers you a giant, bulletproof data locker for free. It launched on Sunday morning and over 250,000 users registered in the first two hours. Dotcom says it's the fastest-growing startup in history.

Sales pitch aside, there is the matter of Dotcom's legal troubles. The 39-year-old German Internet entrepreneur is effectively very blatantly flipping off authorities by launching a new file-sharing service one year to the minute after an FBI-led investigation into Dotcom's old venture, Megaupload, culminated in a commando-heavy raid on his New Zealand mansion. Dotcom took it one insulting stage further by orchestrating a mock raid during the Mega launch party that included baclava-clad invaders, scantily clad dancers and a helicopter with "FBI" emblazoned on the side. Two of the characters introduced Dotcom as "a multimillionaire maniac, heavyweight champion, three-time Academy Award winner and qualified veterinarian."

In one regard, there's absolutely nothing wrong with Mega as a concept. Feature-wise it's roughly identical to other cloud-based storage services like Dropbox or Google Drive, only it offers a lot more storage for a lot less money. (Dropbox gives you two gigabytes of free storage, and Google Drive gives you five.) As the Megaupload case makes clear, though, lots of people user free data-storage sites to pirate movies, music and other copyrighted materials. The case against Dotcom alleges the walking cartoon character of an entrepreneur of knowingly enabling half a billion dollars worth of intellectual property theft. Said the Motion Picture Association of America of the new service'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." In other words, this Dotcom character is shady so this new Dotcom product must be shady, too.

But there's also something that's obviously wrong with Mega. Dotcom promised when seeking bail after last year's raid that he would not start any Megaupload-type businesses until his criminal case was resolved. Now that his legal team has proved successful at delaying the indictment hearing until August and perhaps indefinitely, it would appear that Dotcom just got impatient and forgetful about making those promises. More likely is the fact that Dotcom truly doesn't believe that he's in any legal trouble. "They can't blame me for the actions of third parties. Megaupload was a dual-use technology," Dotcom told The Guardian ahead of the Mega launch. "You can use it for good things, and you can use it for bad things. If someone sends something illegal in an envelope through your postal service, you don't shut down the post office."

That argument makes some sense, and it would be wonderful for Dotcom and all the other free culture advocates of the world if it were actually true. But ask the founders of Napster, KaZaa and The Pirate Bay if being the Internet's post office means you're not responsible for what your customers are shipping. For better or worse, the entertainment industry lobby has proved very effective at policing the web for would-be criminals that are violating laws like the Digital Millenium Copyright Act (DCMA) and targeting the sites that enable piracy in the process. It is helpful that Mega's new super-encryption software makes it very difficult for authorities to figure out what people are sharing. That's similar to what people said about The Pirate Bay and other torrent sites that aren't even hosting any pirate material, and its founders have been in and out of jail for years.

It all sounds a little bit too good to be true. The site offers ten times as much storage as its next competitor without collecting a penny from users. It's evidently impenetrable and as private as you can get online. And for Dotcom himself, it was a smashing success almost immediately, despite the fact that it's probably illegal in one way or another. For a guy who has lifesized sculptures of a giraffe and a rhino in his front yard, it's probably safe to say that Kim Dotcom lives in a fantasy world sometimes. At least it's fun to spectate.

Image via Flickr