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Mega hits out at inclusion in critical cyber locker report

By | Published on Monday 22 September 2014


The boss of Mega, the file-storage service set up by MegaUpload founder Kim Dotcom after his original business was shut down by the US authorities, has hit out at a new report which brands the New Zealand-based operation as a “shadowy cyber locker”.

Mega is included in a new report from the Washington-based Digital Citizens Alliance, which looks at numerous companies that offer file-storage and sharing facilities. Its particular focus is how such platforms are often used for illegal practices, most often copyright infringement, and how the owners of said services allegedly allow rampant piracy because it generates subscriptions and therefore income.

That, of course, was the primary allegation against Dotcom’s MegaUpload, which was shutdown by the Americans in 2012. Criminal proceedings against the firm’s management, including Dotcom, are ongoing, with the US still trying to get the accused extradited to face money laundering and copyright infringement charges in the American courts.

The Digital Citizens Alliance report basically notes that there are plenty of other companies operating file-transfer platforms that are also possibly just a cover for copyright infringement, charging monthly subscriptions that technically give customers cloud storage space for their own files, but also provide access to infringing music, movie and TV content sitting in other users’ digital lockers, which, copyright owners say, is the real reason consumers pay the subscription charges in the first place.

One of the aims of the Alliance’s report seems to be to put pressure on the credit card companies and firms like PayPal to stop taking monies for such services, to cut off their revenues. Of course many of the targeted companies, like MegaUpload, would likely argue that they offer legitimate services, and that they respond to takedown requests from copyright owners when infringing content is spotted, meaning they operate in line with US copyright law. Though the report argues that the distribution of infringing content accounts for a very large portion of these firm’s operations.

But Mega, the file-transfer company Dotcom set up after the forced shutdown of MegaUpload, argues that that is simply not to case with its operations. And Torrentfreak supports that claim, reckoning that the Alliance’s report is skewed because, while it may be true that the majority of the publicly shared files stored on the Mega platform infringe copyright, as the report claims, that ignores the fact that the vast majority of files uploaded to the Mega servers are not shared at all.

Certainly Mega CEO Graham Gaylard has reacted angrily to his firm’s inclusion in the report, telling Torrentfreak that he has demanded the Alliance amend its document and issue an apology about Mega’s inclusion in it. Said Gaylard: “Mega is a privacy company that provides end-to-end encrypted cloud storage controlled by the customer. Mega totally refutes that it is a cyber locker business as that term is defined and discussed in this report”.

He goes on: “We are vigorous in complying with best practice legal takedown policies and do so very quickly. The reality, though, is that we receive a very low number of takedown requests because our aim is to have people use our services for privacy and security, not for sharing infringing content. Mega is not a haven for piracy, does not distribute malware, and definitely does not engage in illegal activities. Mega is running a legitimate business alongside other cloud storage providers in a highly competitive market”.

Gaylard also hit out at the insinuation that Mega incentivises users to upload infringing content, which is one of the accusations previously made against MegaUpload. But, the Mega CEO says, his company’s incentives programme is entirely based on users referring or helping attract new customers, not on the amount of content they upload. “It is designed to reward genuine referrers and the developers of apps who make our cloud storage platform more attractive”.

Elsewhere in Dotcom news, the Mega founder’s political endeavours in his adopted country did not come to much in the New Zealand elections this weekend. The Internet Mana party, a partnership between Dotcom’s political group and supporters of Māori activist Hone Harawira, scored just over 1.2% of the vote, which is someway of the 5% required for representation in the New Zealand parliament.

After the results came in, with Dotcom’s arch-rival in the political domain, incumbent NZ PM John Key, winning an easy victory overall, the Mega chief conceded that his public persona likely damaged the chances of the Internet Mana movement.