Internet entrepreneur Kim Dotcom dealt blow in extradition fight

Supreme Court rules against Megaupload founder's appeal to access US prosecutors' evidence to be presented at extradition hearing in July

PUBLISHED : Friday, 21 March, 2014, 10:40pm
UPDATED : Saturday, 22 March, 2014, 4:34am

Internet entrepreneur Kim Dotcom yesterday suffered another blow to his fight against extradition to the United States to face online piracy charges after New Zealand's highest court rejected his appeal to access evidence to be presented at the hearing.

The Supreme Court ruled that US prosecutors were not required to disclose evidence at a hearing set for July to extradite the former Hong Kong resident, who founded the online file sharing site Megaupload, and his three colleagues to the United States, where they are also charged with mass copyright infringement, money laundering and racketeering.

The US federal government charges that the Megaupload website, which was shut down in 2012, cost film studios and record companies more than US$500 million and generated more than US$175 million in criminal proceeds by letting users store and share copyrighted material, such as movies and TV shows.

If Dotcom, a German national with New Zealand residency, is extradited, the ensuing copyright case could set a precedent for internet liability laws, potentially tightening regulations on disseminating copyrighted material on the internet.

New Zealand Prime Minister John Key told the South China Morning Post yesterday that as long as US justice officials meet the conditions of the bilateral extradition treaty between New Zealand and the US, Dotcom would be forced to face charges in the United States.

"When a counterpart that has an extradition treaty with us invokes the treaty, we honour that and work alongside them," said Key in Hong Kong.

"It's equally true when we do something the other way, so we've brought people out of the United States for paedophile charges or other things like that," he said.

The flamboyant Dotcom has taken to social media to declare his innocence and claims he is being wrongly targeted. However, Key refused to be drawn into the controversy.

"What's happened is he is a master conspiracy theorist and he has all these great conspiracies about why all this is happening. In my opinion, none of that is true," Key said.

Yesterday's ruling, which culminates a series of appeals by both parties, stated that a lower court was wrong to order disclosure of evidence in the first place.

Justice John McGrath said in the Supreme Court's decision that a summary of the evidence had been provided and that was sufficient. He said Dotcom had not indicated why he could not fight the extradition charge without full access to the evidence.

The evidence in question refers to documents in Dotcom's belongings, including laptops and hard drives, which were seized when the New Zealand government in 2012 arrested the internet tycoon at his mansion near Auckland in a raid requested by US authorities.

Key did admit that New Zealand's spy agency got it wrong when it eavesdropped on Dotcom's communications prior to the raid despite the fact that he had become a New Zealand resident. "We collected some information about him in the belief that he was a foreigner through one of our intelligence agencies. In fact, the specific nature of his visa was that he should have been treated as a New Zealander so we've admitted that and it was a mistake," Key said.

Yesterday's ruling deals another knock to Dotcom's defence, coming just a month after the High Court ruled that the search warrant used in the arrest of the entrepreneur and his colleagues was legal. Dotcom is appealing that decision.

US attorney Ira Rothken , a member of Dotcom's legal team, said that the ruling was "quite robust", adding it could put the defence at a disadvantage at the extradition hearing.

"We have a much higher hurdle because of today's ruling in getting disclosures, and that will impact the fairness of the hearing," Rothken said.

Dotcom, who also goes by the name of Kim Schmitz, says that Megaupload was merely an online warehouse and should not be held accountable if stored content was obtained illegally. The site housed everything from family photos to Hollywood blockbusters and was one of the most visited sites on the internet in its heyday.

The US Justice Department counters that Megaupload encouraged piracy by paying users who uploaded popular content and by deleting content that was not regularly downloaded.