Mega Goes Legal, Issues Ultimatum Over Cyberlocker Report

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Last week NetNames produced a report on "shadowy" file-hosting sites which surprisingly included Mega.co.nz. The file-hosting company responded by threatening "further action" unless it was removed from the "defamatory" report. Now, as promised, the New Zealand-based company is taking things to the next level.

Last week the Digital Citizens Alliance and NetNames released a new report with the aim of shining light on the business models of “shadowy” file-storage sites.

While listing some domains that may well live up to that less-than-flattering billing, the authors of Behind The Cyberlocker Door: A Report How Shadowy Cyberlockers Use Credit Card Companies to Make Millions, also decided to include New Zealand-based Mega.

Mega was founded by Kim Dotcom but the site bears little resemblance to his now defunct Megaupload. Perhaps most importantly, Mega was the most-scrutinized file-hosting startup ever, so every single detail simply had to be squeaky clean. As a result the site took extensive legal advice to ensure that it complies with every single facet of the law.

Nevertheless, NetNames took the decision to put Mega in its report anyway, bundling the site in with what are described as some of the market’s most dubious players. This was not received well by Mega CEO Graham Gaylard. In a TorrentFreak article he demanded a full apology from NetNames and Digital Citizens Alliance and for his company to be withdrawn from the report. Failure to do so would result in “further action”, he said.

TF asked NetNames’ David Price whether his company stood by its allegations. The response suggested that it did and no apology was forthcoming. It’s been a week since that ultimatum and as promised Mega is now making good on its threats.

“Mega’s legal counsel has written to NetNames, Digital Citizens Alliance and The Internet Technology & Innovation Foundation (ITIF) stating that the report is clearly defamatory,” Mega CEO Graham Gaylard told TorrentFreak this morning.

Given NetNames’ and Digital Citizens Alliance failure to respond, it comes as little surprise that Mega’s formalized demands now go beyond an apology and retraction.

Firstly, Mega’s legal team are now demanding the removal of the report, and all references to it, from all channels under the respondents’ control. They also demand that further circulation of the report must be discontinued and no additional references to it should be made in public.

That’s a tough one. NetNames’ effort is currently the most-circulated report in the ‘piracy’ space and TorrentFreak is also informed that the paper is set to become the supporting documentation to Hollywood and the labels’ follow-the-money anti-piracy drive.

Mega are also demanding a list of everyone who has had a copy of the report made available to them along with details of all locations where the report has been published. Again, that will be an interesting one to see Mega’s targets fulfill.

Finally, Mega is demanding a full public apology “to its satisfaction” to be published on the homepages of the respondents’ websites. What form that could take without discrediting the rest of the report is probably up for negotiation, but having Mega in there at all was bound to be a controversial and potentially damaging move.

Mega has given the companies seven days to comply with the above requests. No official line has been provided as to what will happen if Mega is met with a refusal, but it seems that the company is serious about protecting its reputation and will do whatever it takes to do that.

It’s perhaps of note that to our knowledge none of the other sites listed in the report have come out publicly to protest their inclusion in it. That’s not to say that some weren’t wrongfully included of course, but when a company like Mega stands up in order to protect its brand that should set off alarm bells.

Do ‘pirate’ sites with “shadowy” business models ever bother to publicly defend their reputations unless they’re the ones being hauled into court?

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