Story image

Mega's legal guns shoot down claims of 'content theft'

15 May 15

Mega, the file storage and encryption firm, has rebutted claims that it operates as a 'cyberlocker' profiting from "content theft" with a legal opinion by Olswang calling the allegations "defamatory".

Auckland-based Mega, which arose from the ashes of Kim Dotcom's Megaupload empire, commissioned a report by international law firm Olswang to investigate a NetNames report that accused Mega of operating illegitimately. The report was then used by US senator Patrick Leahy to pressure Visa and Mastercard to stop processing users' payments for Mega, and online payment system PayPal later succumbed to the same pressure.

The Olswang report found no evidence that the bulk files stored by Mega infringe on copyright holders, the firm's target audience are different from typical 'cyberlocker' users as its services wouldn't benefit them, that the platform isn't attractive for mass distribution, and that it's business model is different from 'cyberlockers'.

"Olswang has concluded that the allegations in the NetNames report are highly defamatory of Mega and appear to have no factual basis whatsoever," the report said. "The NetNames report contains numerous factual inaccuracies and methodological errors and draws conclusions that are entirely wrong."

Mega chief executive Graham Gaylard said the firm is now taking legal advice on the NetNames report.

"Our users can have absolute confidence that Mega has been designed and continues to operate within the law and in compliance with all regulatory requirements," Gaylard said in a statement. "We operate an efficient and fully compliant takedown process and we have very low levels of infringing content."

Earlier this month, Mega's shareholders pulled out of plans to list on the NZX via a back-door listing through shell company TRS Investments after several delays.

Under the deal, TRS was to have acquired Mega for $210 million by issuing 700 million shares at 30 cents apiece to Mega shareholders, after undertaking a share consolidation. Mega shareholders would then have owned 99 percent of TRS, which would change its name to Mega.

Megaupload was frozen after Dotcom's high profile arrest at the behest of the US federal government and he has since stepped back from the new Mega, which has more than 18 million registered users.

Commerce Commission report shows fibre is hot on the heels of copper
The report shows that as of 30 September 2018 there were 668,850 households and businesses connected to fibre, an increase of 45% from 2017.
Dr Ryan Ko steps down as head of Cybersecurity Researchers of Waikato
Dr Ko is off to Australia to become the University of Queensland’s UQ Cyber Security chair and director.
Businesses in APAC are ahead of the global digital transformation game
“And it’s more about people and culture - about change management - along with investing in the technology.”
HubSpot announces fund for 'customer first' startups
HubSpot is pouring US$30 million (NZ$40 million) into a new fund to support startups that demonstrate ‘customer first’ approach of not only growing bigger, but growing better.
Mac malware on WatchGuard’s top ten list for first time
The report is based on data from active WatchGuard Firebox unified threat management appliances and covers the major malware campaigns.
LearnCoach closes $1.5m seed round
The tutorials are designed for students who want to learn NCEA subjects but can’t make it to a physical classroom.
Bin 'em: Those bomb threat emails are complete hoaxes
A worldwide spate of spam emails claiming there is a bomb in the recipient’s building is almost certainly a hoax.
Marriott sets up call centres to answer questions on data breach
Marriott has released an update on the breach of the Starwood guest reservation data breach which affected 500 million guests.