The Freedom to Be Free: Battle Lines Drawn in Global Copyright Confrontation

MEDIA, WHISTLEBLOWING - SURVEILLANCE, 30 Jan 2012

Marcel Rosenbach and Gregor Peter Schmitz – Der Spiegel

Recent weeks have seen spectacular arrests and mounting tension between those who would like to make it harder to share copyrighted material online and those who champion Internet freedom. Controversial US legislation has been shelved, but the battle continues.

It was roughly 6:30 a.m. when two police helicopters suddenly started circling over the “Dotcom mansion” northwest of Auckland, one of the most expensive estates in New Zealand. By that time, it must have been clear to the mansion’s occupant that he was about to say goodbye to his sweet life, at least for a while. Although he locked himself in a safe room with a gun, the authorities eventually managed to reach Kim Dotcom, as the man currently calls himself. He is also known as Kim Tim Jim Vestor, Dr. Evil or simply Kimble. In 1974, he was born Kim Schmitz in the northern German city of Kiel.

Schmitz, probably the most colorful figure in Germany’s “New Economy,” had moved halfway around the world to escape his reputation. And, at least from his standpoint, he had finally achieved success. With websites like Megaupload and Megavideo, Schmitz had built an enormous Internet empire beginning roughly in the mid-1990s. At times, Megaupload was in 13^th place among the most-visited sites worldwide.

According to the US indictment against him, Schmitz and his associates have raked in more than $175 million (€135 million) from their activities. For more than two years, the FBI had investigated Schmitz and his associates, including German nationals Mathias O., Sven E. and Finn B., all of whom have also been indicted.

It’s no coincidence that the raid took place when Dotcom and two other Germans happened to be in New Zealand. Germany doesn’t extradite its citizens to the United States, but New Zealand will most likely comply with American wishes. The defendants are expected to face charges of forming a criminal organization, committing serious copyright violations and engaging in moneylaundering.

Drawing the Battle Lines

Megaupload, which the authorities have now shut down, is based on a giant online storage infrastructure. Users upload files to this so-called “filehoster,” which they can then make available to other users through a link to the site. Megaupload became a global success as one of the largest markets for movies and music. Through links on sites like kino.to, users often reached Schmitz’s websites, where the illegal content was then streamed or offered for download. The system functioned like an online media library, in which everything from current blockbusters to e-books and computer games could be had with a few mouse clicks — and for free. Meanwhile, Kim and his associates earned millions through online advertising.

The US authorities’ most spectacular strike to date against the world’s booming illegal trade in copyright-protected content comes at a highly sensitive time. The arrests took place in the same week that saw the controversy over new copyright legislation in the United States come to a head. For months, a powerful lobby consisting of politicians, Hollywood executives and music-industry representatives has been trying to get two new laws passed, SOPA (“Stop Online Piracy Act”) and PIPA (“Protect IP Act”), which would make it easier to prosecute data pirates like the ones behind Megaupload.

Proponents of the anti-piracy laws argue that such pirates have cost these industries billions in lost revenue. But, for the laws’ opponents, nothing less than the future of the free Internet is at stake. In addition to online giants such as Wikipedia, Google and Facebook, it is primarily the Internet community that denounces the proposed legislation as marking the dawn of institutionalized Internet censorship.

Last week, they organized one of the most remarkable protest campaigns in the history of the World Wide Web. About 115,000 websites followed the lead of the English-language site Wikipedia by participating in a one-day “strike.” As a result, instead of getting knowledge at their fingerprints, would-be users of these sites saw nothing but black pages. Commercial providers like Google collected illustrators for a petition against the plan and have found over 7 million supporters to date. Facebook founder Mark Zuckerberg posted that “ill-conceived laws” should not be allowed to impede the Internet’s development.

Re-evaluating Positions

In fact, one of the main things that SOPA and PIPA would do is force US-based Internet service providers (ISPs) to play the role of deputy sheriff for the authorities. Under the legislation, anyone who maintains a website would have to guarantee that no copyrights are violated on any of the sites they link to, regardless of whether they are based in the United States or not. Should the linked sites violate copyright laws, US authorities could force ISPs to block access to the offending websites.

If there is one issue that has the international Internet community up in arms, it is these plans to block access to websites. But, thanks to their protest, it wasn’t long before members of the US Congress and US Senate who had been supporting the new laws got the message. “Thanks for all the calls, emails and tweets,” Oregon Senator Jeff Merkley promptly tweeted. “I will be opposing #SOPA and #PIPA. We can’t endanger an open internet.”

Indeed, many elected representatives from both sides of the aisle quickly distanced themselves from the plans and, by late last week, the draft legislation appeared to be temporarily on ice. The White House also indicated a lack of enthusiasm for the proposed new laws. While insisting that the fight against online piracy is important, President Barack Obama’s advisers have also noted that an innovative Internet is more important for America’s future and that any regulation “must not tamper with the technical architecture of the Internet.”

The Price of Hubris

The news of the strike against Megaupload has only heightened an already tense mood. The hacker collective known as Anonymous promptly attacked a number of websites, including those of the US Department of Justice, the FBI and major lobbying groups, causing some of them to become temporarily unavailable.

Of course, all of this will come as little comfort to Schmitz, the erstwhile Internet tycoon. In the first photos taken after his arrest, he looked pale and distressed –and, therefore, much different than he seemed in December, when he responded to a SPIEGEL inquiry by saying that he had achieved everything he had ever dreamed of, adding: “Go fuck yourselves.” Now he will be represented by a star attorney who once defended former President Bill Clinton.

The 72-page indictment demonstrates that the FBI deeply penetrated an organization it has described as a “mega conspiracy.” The indictment includes page after page of incriminating emails stretching back several years. If the mega-moguls were sentenced on all counts, they could face decades in prison.

Searches conducted in recent weeks by German officials have also led to the seizure of substantial assets. The public prosecutor’s office in Frankfurt would only confirm that the United States had made a request for mutual assistance. In New Zealand, the authorities also seized weapons, paintings and numerous luxury cars, including a pink Cadillac, a Rolls-Royce Phantom and several expensive Mercedes sedans. Schmitz had chosen a very distinctive vanity plate for one of these small reminders of his native Germany: “Mafia.”

Translated from the German by Christopher Sultan

Go to Original – spiegel.de

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