Kim Dotcom

Big bucks and big brother

Kim Dotcom, whose internet business began in this city, says his fight against extradition to the United States is a struggle for freedom

PUBLISHED : Sunday, 24 March, 2013, 12:00am
UPDATED : Sunday, 24 March, 2013, 5:40am

They look as different as chalk and cheese but Kim Dotcom and Julian Assange are, in some ways, identical.

Both are former computer hackers wanted by the US government; both claim to fight for internet freedom; and both cannot travel freely.

Both are also highly vocal about their self-worth, are media-savvy and are adept at winning public support.

And according to Dotcom, the founder of now-defunct file-sharing site Megaupload, the similarities he shares with the embattled Wikileaks founder do not stop there.

"In my opinion, we are both disruptors and innovators," Dotcom told the Sunday Morning Post.

"We have both done good things for society and stand for internet freedom. We are both not evil nor criminal and we are both facing a powerful enemy trying to destroy us and our ideas."

Dotcom, 39, who is currently out on bail in New Zealand awaiting an August extradition hearing, said although he had not spoken to nor met Assange, he respected him.

"Assange is just a human being with flaws like you and me, but the idea behind his efforts is powerful and necessary," Dotcom said.

"A truly transparent government is the least corrupt and abusive. Think about that and not the person and you will see how easy it is to embrace Julian."

Assange is currently holed up in the Ecuadorian embassy in London, where he was granted asylum last June to avoid extradition to Sweden to face allegations of rape. Assange says he is innocent and fears if he travels to Sweden, it will lead to onward extradition to the United States.

While the silver-haired, slim-built Assange has been in the headlines for years, most people had never heard of Kim Dotcom - a flamboyant internet entrepreneur with an imposing two-metre frame and reportedly weighing more than 130kg - until last January.

That is when a swarm of heavily armed police swooped in on Dotcom's multi-million dollar mansion in the picturesque hills of Coastesville, a 30-minute drive north of Auckland, New Zealand.

Dotcom and three other business partners were arrested during a dramatic dawn raid, which has since been ruled illegal by a High Court judge. The US claims that Megaupload and related sites netted Dotcom and his associates more than US$175 million in criminal proceeds and cost copyright owners more than US$500 million by offering pirated copies of movies, television shows and other content.

At the same time, about 100 customs officers in Hong Kong raided properties linked to Dotcom and Megaupload, seizing millions in assets and bank accounts, at the request of the FBI.

So who is Kim Dotcom?

Born in Germany as Kim Schmitz, the young Kim first got into trouble with the law at 19. He was arrested and held in custody for computer fraud and data espionage, but brokered a deal to escape jail time.

A few years later, he was arrested again on suspicion of insider trading. He was holidaying in Bangkok at the time and the German authorities ordered him to return home to face the charges.

He did and despite being told by his lawyer that he could win, he ended up spending five months in custody, waiting for his case to be heard.

Frustrated by the legal process, he eventually pleaded guilty and hot-footed it out of Germany.

He landed in Hong Kong in late 2003, hoping for a fresh start in a city that was abuzz with a "can do" attitude.

"Living in Hong Kong almost feels like time travel because everything is possible, everything can get done 'now'," Dotcom said from New Zealand. "I am like that. I am like Hong Kong."

Shortly after arriving in the city, he started working on a cloud-storage site and by 2005, it was up and running.

"Megaupload was born and raised in Hong Kong," he said.

That same year, he officially changed his name to Kim Dotcom.

At the height of its popularity, the site claimed to have 50 million users per day or four per cent of internet traffic worldwide.

A few years later, Dotcom met Mona Verga, a beautiful Filipina model in Manila who was 14 years his junior.

By 2010, they were married with three young children and Dotcom had also successfully applied for New Zealand residency. The family spent a few months of every year in a rented holiday home on the outskirts of Auckland.

Not one to shy away from enjoying the fruits of his labour, Dotcom openly enjoyed the high life, renting and renovating the entire top floor of the Grand Hyatt in Wan Chai with sweeping views of Victoria Harbour. But since his arrest last January, everything he built in Hong Kong has gone, either into the hands of authorities or into storage.

In the meantime, Dotcom has taken to social media - namely Twitter - to undermine the US government's case against him."In our case they ignored due process, safe harbour laws for service providers like Megaupload and the rights of millions of users who stored legitimate files with us," he said.

Part of Dotcom's argument is that his site was protected by the Digital Millennium Copyright Act that says that sites such as Megaupload cannot be held responsible for copyright-infringing material, so long as the site acts quickly to take down any offending content. Dotcom also believes the timing of his arrest was linked to political donations from Hollywood.

"The Hollywood fundraisers for Obama's re-election campaign were set for February, March and April [in 2012] and the White House had to provide their important donors with an alternative to the Stop Online Piracy Act," he said.

"The FBI was well aware that my co-defendants and I had made arrangements to rent a villa in Los Angeles in August of 2012 for three months."

The purpose of the trip was to meet studio executives to discuss licensing content for a new site called Megamovie, Dotcom said, positioned as a competitor to Netflix, an online streaming site for movies and TV shows.

"The FBI could have just picked us up from the airport. There was no need for extradition, but they were in a hurry."

The urgency has come to a halt, with extradition hearings for Dotcom and three of his co-accused originally slated for this month, but since re-scheduled to early August.

"We are looking forward to the court hearings that will determine if we should be extradited or not," Dotcom said. "The case has no merits because our business was a good corporate citizen acting within the boundaries of the law."

Fans of Dotcom love his anti-establishment and irreverent style, while critics say he is manipulating the media and positioning himself as a victim.

Either way, he attracted plenty of attention when, on the first anniversary of Megaupload's death and his arrest, he launched a new venture, simply called Mega.

"We have the right to innovate and create a new business and that's what we did. We took our seven years of experience in the cloud storage industry and created Mega from scratch."

Like its predecessor, the new site allows users to store and share large files, but the key difference is that all content on Mega will be encrypted, aiming to undermine the "big brother" trend of governments worldwide and part of Dotcom's wider plan to encrypt half the internet.

"I was shocked at the amount of data that is being captured and stored around the world. Our lives are an open book. The path to end this abuse is encryption and for encryption to become popular and gain critical mass, it needs to be easy and happen on the fly," he said. "Mega has created technology that automatically encrypts everything you do on the internet."

A few weeks ago, Hong Kong was in the top five high-traffic countries for Mega, Dotcom said, but he could not reveal exact figures ahead of plans to float the company in New Zealand.

On recent reports of China's military hacking US companies, Dotcom said the news did not surprise him. "Of course it's true, but the US government has been doing this much longer than the Chinese," he said.

"After years of invading Chinese computer systems and the release of viruses and backdoors into Chinese network infrastructure, the US government complains? They started it. What we are witnessing is a full-on cyber war which could quickly escalate into a bigger conflict."

When the internet entrepreneur isn't shaking hands with Apple co-founder Steve Wozniak - who has publicly stated his support for Dotcom and visited him in New Zealand - Dotcom can be seen in Twitter pictures with his wife Mona, and their five young children all with names starting with K: Kaylo, Kimmo, Kobi, Kylee and Keera.

Dotcom's biography is half finished, he's working on an album which should be done by Christmas and there are rumours of a movie based on his life, but don't ask him which actor he would like to play his character.

"I have no idea. Someone overweight and funny like me," he joked.