U.S. says Kim DotCom swore not to recreate MegaUpload

DotCom is about to start another cloud locker service. The U.S. Attorney notes that DotCom said under oath he would not restart the business.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
3 min read
MegaUpload founder Kim DotCom plans to launch a new file-sharing service called Mega but the U.S. says that he swore under oath that he would do no such thing. Kim DotCom/Greg Sandoval/CNET

Kim DotCom, the flamboyant founder of the now defunct MegaUpload, made news today by announcing the coming of Mega,a new cloud storage service that is similar to MegaUpload.

But with the launch of a service similar to MegaUpload, set for the first of the year, officials in the United States said that DotCom will have misled a New Zealand court and possibly violated the terms of his bail and opened himself up to new charges.

Last January, DotCom and six others linked to MegaUpload were accused in an indictment filed by the U.S. Attorney of operating MegaUpload as a criminal enterprise. U.S. officials allege in papers filed in federal court for the Eastern District of Virginia that the defendants encouraged millions of people around the world to store pirated movies, music and other media in MegaUpload's Internet lockers. DotCom and other MegaUpload managers then pocketed tens of millions of dollars by selling advertising on the service as well as premium subscriptions. The United States is trying to extradite DotCom from New Zealand, where he now resides.

The case against MegaUpload is one of the world's most watched copyright cases. Copyright owners claim that MegaUpload is just one of many pirate sites that try to hide behind the Digital Millennium Copyright Act but do not qualify for the law's protections. MegaUpload's lawyers say that the site's operators took pains to operate a legal service and that the U.S. government is wrongfully persecuting DotCom and the other defendants.

After DotCom's arrest, the U.S. said he applied for bail and denied there was any chance he would or could relaunch MegaUpload or a similar service.

There is no realistic prospect or possibility of restoring the business or recommencing the business having regard to both the seizure of the requisite servers and data storage equipment and to the seizure of all funds, monies and assets held both by Megaupload and by me personally... Until the merits of the US government's charges against me and my co-defendants, as well as the company, have been determined there is no ability, let alone financial incentive available to me, to try to continue to operate the business as is alleged.

And a month later, DotCom said this under oath according to court documents: "I can assure the Court that I have no intention and there is no risk of my reactivating the Megaupload.com website or establishing a similar internet-based business during the period until the resolution of the extradition proceedings."

The United States is grasping at straws, says Ira Rothken, the Silicon Valley attorney who is overseeing MegaUpload's worldwide defense.

"Any new technology business started from scratch such as Me.ga does not appear to be addressed in the affidavit which was specific to Megaupload as the 'business as is alleged.' If bail conditions are implicated then approval of the New Zealand authorities will be sought by [DotCom's] New Zealand counsel...Kim Dotcom is innocent, is presumed innocent, and is entitled to innovate and work in technology like any other innocent New Zealander. Indeed, Me.ga may help stimulate further cloud storage innovation in New Zealand and the rest of the world and that should not be something the DOJ, if well intentioned, should complain about."

An extradition hearing for DotCom is scheduled for March.