The Dotcom case

Later in this post, I’ll come to how the NZ law enforcement agencies have behaved, but initially I want to cover Dotcom himself. While I admire his intelligence, technical, gaming and PR skills, I’m not quite in the category that he is a poor little innocent victim.

First of all, it is worth recalling he does have a less than clean record to date, before . Specifically:

  • hacking, including selling access codes
  • arrested trafficking in stolen phone calling card numbers
  • convicted of 11 counts of computer fraud and 10 counts of data espionage
  • accepting gang-related stolen goods
  • guilty of insider trading in Germany’s then largest ever case of its type
  • guilty of embezzlement

The pattern is someone who is very focused on making money, and pushes the rules, sometimes breaking them.

There is also a reasonable amount of evidence he is a bit of a fantasist, as detailed here. No that’s fine – we all want to be James Bond to some degree, but it is perhaps a reason not to regard everything he says as the holy gospel.

We then have Megaupload. This case is essentially about infringement. I think most people know I was a prominent campaigner against the original S92A and the blackout campaign as it would have seen people lose Internet access upon accusation.

I’ve generally been against most of the demands of the music and film industries with NZ copyright law, and am involved in the fair deal campaign to support NZ standing firm in the TPP negotiations against any provisions which would require a change to our domestic intellectual property laws.

I’m also very firmly in the camp that Internet sites should not be held responsible for the actions of their users, so long as they comply with the law.

However on the basis of evidence seen to date, I don’t quite buy the argument that Megaupload was merely a file-sharing service the same as YouTube or Rapidshare. Their business model is one that arguably encouraged peoplee to not just share popular infringing material, but to make money from it – as did Megauplaod. Quite different to non-commercial torrent sharing.

It is claimed for example that one user, VW, uploaded 17,000 files over six years resulting in 334 million views, and none of the files had ever been deleted, despite takedown notices. My understanding is that links to files were deleted, but not files.

In my personal opinion, Dotcom built a business absolutely based on making money from people sharing popular files, that they did not have copyright of. There is a reason it become 4% of all Internet traffic.

However there is a big *If*. He may have done it legally. While one can debate the ethics of certain actions, it is the law which states enforce. He may have managed to set up his business model in such a way that he made tens of millions from the site, and didn’t break US laws. Ultimately this issue will be decided by Judges – initially in NZ on whether there is enough evidence of offences that would be illegal in both NZ and the US – and then if extradited in the US in a trial.

As with his previous actions, I think Dotcom set out to push the law to its boundary. He may have stepped over. He may not have. That is for the legal system to decide. But I don’t accept the analogy that Megaupload operated just like YouTube or Rapidshare, and that a guilty verdict for Dotcom would affect those other sites greatly.

We then come to the NZ side of things. The exact details of the role should be made public soon, and will be fascinating. Graeme Edgeler has an excellent post on this issue. He raises the issue of should the GCSB have been involved at all, even of Dotcom did not have residency.

The overall impression I have of NZ law enforcement agencies is they were desperately keen to impress the boys from the US. To have the FBI and likes over here saying this guy is wanted for hundreds of millions of dollars of charges, and this case will be globally massive seemed to have got people into a mindset that we have to make sure we don’t disappoint Uncle Sam by just sending in Constable Smith to interview Dotcom.

Caution seems to have been thrown to the wind, in an attempt to impress that we are up to the job. Ironically the opposite has happened, and NZ authorities have ended up with egg on their face several times. Nowhere it seems were senior officials saying “Hey, let’s slow down and make sure everything is watertight and double checked”. The list of mistakes include:

  • An arguably over the top use of resources in the original raid. Armed were warranted as Dotcom did have weapons and did not initially surrender, but not sure quite that much force was needed.
  • A paperwork error saw his property seized without giving proper notice
  • Invalid search warrants for the raid
  • The probable unlawful interception of communications by the GCSB

NZ authorities absolutely have an obligation to assist the US with legal extradition efforts. I am not one of those saying we should not have co-operated. If someone broke the law in NZ, and lived in the US, we value the fact that extradition treaties allow them to be sent to NZ.

Whether or not Dotcom broke US law is a matter for Judges. It is unknown at this stage if any significant evidence will be inadmissible due to mistakes made by NZ authorities.  Time will tell. And as I have said, I think Dotcom’s strategy was to push the boundary of the law as far as he could, and he may or may not have stepped outside it. Ultimately that is not a matter for us.

What is a matter for us, is the response from NZ law enforcement agencies. I doubt I am alone is concluding the culture was shall we say too overly enthusiastic, and not cautious enough. The end result has been considerable embarrassment for them, for the Government, and potentially a significant weakening of the case against Dotcom. Hopefully there will be lessons learnt.

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