At 6:48 a.m. local time Sunday, the Internet tycoon Kim Dotcom opened his new file-storage website to the public - one year to the minute after the police raided the mansion he rents in New Zealand.The raid was part of a coordinated operation with the FBI that also shut down Megaupload, the file-sharing business he had founded.
Dotcom faces charges in the United States of pirating copyrighted material and money laundering and is awaiting an extradition hearing in New Zealand. But on Sunday, he said his focus was on the new site, which was already straining under heavy traffic within two hours of its introduction. In the first 14 hours of the site's operation, more than half a million people registered to use it, Dotcom said.
Dotcom, a German citizen and permanent resident of New Zealand who was born Kim Schmitz, was arrested on Jan. 20, 2012. During the raid on his home that day, the police seized vehicles worth about NZ$6 million (about $5 million) and froze about NZ$11 million in bank accounts, according to a news release issued at the time.
Mega, Dotcom's new website, is a file storage and sharing system that encrypts files on the user's computer before they are uploaded to the site's servers. Files can then be downloaded and decrypted. This means that files on Mega's servers cannot be read by anyone, including by the company itself, without the user's decryption key.
The allegation that Dotcom's previous venture, Megaupload, knew its users were illegally uploading copyrighted material - and indeed sought to encourage the practice - is a crucial part of the U.S. Justice Department's indictment against the site and those who operated it.
In contrast, the new site appears to intentionally distance Mega from any legal responsibility for the content on its servers, although the terms and conditions of the site do explicitly forbid uploading copyrighted material.
American prosecutors declined to comment on the new site, The Associated Press reported, referring only to a court document that cites promises DotcomBSE 0.00 % made while seeking bail, including one that he would not start a Megaupload-style business until the criminal case was resolved.
"Legally it's probably the most scrutinized Internet startup in history," Dotcom said. "Every pixel on the site has been checked for all kinds of illegal - potential legal challenges. We have a great team of very talented lawyers that are experts in intellectual-property and Internet law, and they have worked together with us to create Mega."
The Motion Picture Association of America, which has filed complaints about what it described as copyright infringement by Megaupload, told the AP that it was skeptical that Dotcom's new site was harmless.
"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," it said in a news release.
The service competes with online storage sites like Dropbox and Google Drive. Dropbox provides 2 gigabytes of storage free, although this can be increased to as much as 18 gigabytes by referring friends to sign up. Google Drive provides 5 gigabytes of storage free. The two sites offer more storage for a monthly fee, but Mega significantly undercuts them on price for the amount of storage offered.
"A year ago, this wouldn't have been possible," Dotcom said. "No one else who is currently in business in the cloud-storage arena can just update their site and be like us. You have to start from scratch."
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