In a setback for advocates of online file-sharing, a New Zealand judge has decided that Megaupload founder Kim Dotcom and three other former managers of the defunct file-hosting service are eligible for extradition to the United States.
In a decision issued in Auckland District Court on Wednesday, Judge Nevin Dawson ruled the US Department of Justice (DOJ) presented enough evidence for New Zealand to honor a US extradition request, according to Twitter posts filed by Radio New Zealand. US prosecutors want Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato to stand trial for criminal copyright violation and related charges.
In a 2012 indictment, the DOJ alleged Megaupload wasn't a legitimate file-hosting service but a thinly disguised criminal enterprise. Prosecutors say Dotcom, the flamboyant CEO, and his staff designed Megaupload to encourage and profit from the illegal sharing by users of digital movies, music, and videogames. Dotcom argues he ran a legitimate business, and that copyright law protects web service providers from liability for copyright infringement committed by customers.
Dawson issued his opinion after wrapping up a two-month long extradition hearing. It's important to note that the judge did not make any findings regarding guilt or innocence. The judge was tasked only with determining whether enough evidence existed to warrant a trial. That is the standard New Zealand requires prosecutors to meet, under its extradition treaty with the United States, before it hands over citizens.
Ira Rothken, Kim's lead lawyer, commented via Twitter: "The @KimDotcom team looks forward to having the US request for extradition reviewed in the High Court. We have no other comments at this time."
Next, the ruling must be approved by a higher court, according to a report by Radio New Zealand. If it stands, then the defendants will be allowed to file appeals, which they almost certainly will do. The nearly four-year-old case still has a long way to go.
The case against Megaupload has easily been among the most-watched internet copyright conflicts. Founded in 2005, Megaupload was once the 13th most frequently visited website in the world. Users stored digital files on the company's servers and were allowed to share their lockers' contents with others. Before they were closed down by the FBI, the service generated $175 million in revenue—money that the music and film industries say belongs to them.
Eventually, USA v. Megaupload may help define the rules for online storage lockers.
"If I lose the internet loses," Dotcom told me during a September interview, at the start of his extradition hearing. "This is a much bigger story than me. This is about the battle between the old and the new. This is the battle of Hollywood trying to get more control over the internet. We know today they're attacking Google."
He added, "they're attacking technologies on a large scale because they don't like what the internet does to their business model."
Steven Fabrizio, General Counsel for the Motion Picture Association of America, the trade group that represents the top Hollywood film studios, said in a statement: "The MPAA welcomes the New Zealand District Court's decision that Kim Dotcom and three colleagues are eligible for surrender to the United States to stand trial for criminal copyright infringement and racketeering. The MPAA believes that for years Dotcom and his associates at Megaupload knowingly and willfully broke the law."