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Downfall of the internet kingpin


File-sharing sites are facing shutdown and, as Andrew Dickens reports, it’s all due to a high-profile arrest in rural New Zealand

Two helicopters appear on the dawn horizon, each carrying armed police towards a sprawling mansion. More officers arrive by road, bringing the total close to 80. As they enter the building, their target inside springs a series of electric locks and heads towards a reinforced panic room. The police cut through the locks and force their way into the room, where they find the target sitting on the floor, close to a sawn-off shotgun.

This was the scene on 20 January on the outskirts of Auckland, New Zealand.

But who was the wanted man? A drug trafficker? An arms dealer? A shark-keeping megalomaniac who really likes gold? Not quite. He was a 37-year-old, 6ft 7in morbidly obese German computer geek whose closest brush with global terrorism was once holding the world-record score for Modern Warfare 3. His name: Kim Dotcom.

Dotcom, previously Kim Schmitz and occasionally Kim Tim Jim Vestor or ‘Kimble’, is the man behind the gargantuan file-sharing website Megaupload.com — a venture estimated to have earned £110m by allowing people to upload and download pretty much any digital content they liked.

Unfortunately for Dotcom, much of this content was music and film copyrighted by incredibly rich American companies who employ incredibly expensive lawyers to bring this kind of thing to the attention of the authorities — in this case the FBI. They in turn asked the New Zealand police to raid Dotcom Mansion and executed warrants in eight other countries, seizing assets worth more than £30m.

Dotcom’s arrest — along with that of his colleagues Finn Batato, Mathias Ortmann and Bram van der Kolk — is the highest-profile move to date in the crackdown on file-sharing sites. Before the FBI closed it down, Megaupload.com — formed in 2005 — claimed more than 150 million registered users, 50 million daily users and four per cent of all web traffic. The FBI estimates it cost copyright holders £315m in lost revenue.


The charges make Dotcom sound like a Teutonic Al Capone: conspiracy to commit racketeering, conspiracy to commit copyright infringement, conspiracy to commit money laundering and criminal copyright infringement. If found guilty, he could face 50 years in prison.

“[Now] laws are increasingly being interpreted to clamp down on intermediaries such as file-sharing sites,” says Peter Adediran, a specialist internet lawyer. “Anyone acting as a ‘mere conduit’ was spared liability, but that’s no longer the case. Richard O’Dwyer, who ran TVShack.net [which pointed people to sites hosting pirated content], is being extradited to the US. Even eBay has been found jointly liable for any infringing goods sold on the site. Politicians are trying to gain control of the web and are singling out individuals.”

It isn’t just the size of Megaupload.com that makes Dotcom an attractive, news-generating target for the FBI; it’s the size of the man’s personality, too.

Born in northern Germany, Dotcom first found notoriety as a teenage hacker, before embarking on a career that blended entrepreneurship and brushes with the law, including two probationary sentences: one for fraud and handling stolen goods, the other for insider trading. However, it’s his PR techniques that have drawn the most attention. He’s a 300lb mountain of self-publicity.

The Megaupload Song, a bizarre promotional number for the site, became a viral hit courtesy of the Megaupload-loving guests that contributed. These included P Diddy, will.i.am, Kanye West and the angelic tones of Dotcom himself. After 9/11, Dotcom offered a £6.3m reward for the capture of Osama Bin Laden and started the Young Intelligent Hackers Against Terrorism group, advising the CIA.

Dotcom also likes to make waves with his lifestyle, frequently being photographed with yachts, helicopters, guns, supercars, models — generally resembling a slightly larger, 21st-century Hugh Hefner.

His self-funded 2001 ‘documentary’ Kimble Goes To Monaco saw Dotcom and friends spend £6.3m in one hedonistic Monaco grand prix weekend. When the police raided Dotcom Mansion, they impounded 18 vehicles worth a total of £3.2m, with number plates such as GOD, HACKER and, perhaps regrettably, GUILTY.

Maybe those police should feel a bit guilty themselves, especially as Dotcom claims to have paid £316,000 for Auckland’s New Year’s Eve fireworks display in 2011. Not one for anonymous anything, let alone donations, he filmed the event, highlighting his whereabouts during the show: his personal helicopter.

“When he first participated in the Gumball in 2001, I quickly learned of Kim’s inability to do anything in half measures,” says Maximillion Cooper, founder of the Gumball 3000 rally, and friend of Dotcom. “My attempts to explain that it wasn’t a race fell on deaf ears. Not only did he arrive at each city several hours before any other Gumballers, but he also had a team of Mercedes mechanics follow him in a small jet.

“I also recall a lunch we had on a St-Tropez beach that year. We arrived by speedboat from the yacht we were staying on, with a huge entourage of staff and bodyguards. We ate lobster and drank champagne as his helicopter hovered above us with his film crew and additional security to watch out for Kim’s enemies. I remember the lunch costing upwards of £100,000 and suitcases of cash arrived by boat to pay for it.

“That isn’t everyday life, though. Kim is actually quite quiet and reserved. Even when hosting a party, he’s more comfortable watching it from a control room. Watching and dictating or manipulating a situation in a ‘Blofeld’ kind of way keeps Kim in his comfort zone.”

It’s not an image frequently associated with internet millionaires. It’s hard to picture Mark Zuckerberg sat stroking a white cat while controlling affairs with a World Domination app. It’s why Dotcom is such big news; he’s an antihero, a criminal to big business.


Dotcom and his colleagues are awaiting an extradition hearing that will decide if they’ll go to the US to face trial. Ironically considering his size, Dotcom is considered a flight risk and has been refused bail. For a man with diabetes, some people are worried it won’t just be his website that ceases to function. The legal prognosis is, however, a little brighter.

“From what I’ve read, I think the authorities have a good chance with the civil copyright infringement charges,” says Simon Halberstam, another specialist internet lawyer. “But the criminal charges will be harder to make stick. That said, their main aims will be to close the site and recover damages, and to send a message out to others.”

If the heavy-handed approach against Dotcom is designed to cause panic, then it’s succeeded. Major file-sharing sites such as FileSonic, FileServe and Uploaded.to have already disabled video and game-sharing functions. But the dream to end free file-sharing is still very much of the pipe variety.

The internet is too big a beast to be tamed.

“It’s like cutting a head off the Hydra. More heads grow back,” says Halberstam. “While there’s no global internet authority, there will always be somewhere for these sites to exist and, until they make money, they haven’t got anything to lose.”

The debate as to whether Dotcom is a fun-loving entrepreneur or information super highwayman will linger. What’s certain is that, no matter how hard the authorities hit him, someone will take his place. Tim Dotcodotuk, anyone?

(Image: Rex Features)



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