One of the primary reasons I became interested in Russia was the Khodorkovsky prosecution. (The expropriation of Shell’s Sakhalin II was another.) My writing about Khodorkovsky brought me in contact with Robert Amsterdam, a member of his legal team. Amsterdam was one of the first to link to my blog, and add me to his blogroll. I broadly agreed with his highly critical views of Russia, and Putinism in particular. I have met him once, and conversed on the phone several times. Although I concluded that he was likely fairly progressive in his leanings, based on his views about Russia and his work in Thailand, and some of his writings about resource nationalism, I believed that he believed in the rule of law, applied impartially, and that he believed that private property is a bulwark of liberty.
I was therefore extremely dismayed to see that he has joined the Kim Dotcom legal defense. Amsterdam offers several justifications for this choice. First, that the prosecution is “essentially bogus.” Second, that the US government, with the complicity of the government of New Zealand, utilized excessive force in arresting Dotcom. Third, that the US government took this action for crass political reason, namely, to retain the political and financial support of the motion picture industry.
I find none of these persuasive. The crucial issue-without which none of the others would arise-is the legitimacy of the prosecution. That is, is there a legitimate basis for the charges brought against Kim Dotcom and his (alleged) co-conspirators?
Here’s what Amsterdam says:
The prosecution’s case is essentially bogus. Kim’s lawyer Ira Rothken has picked apart the allegations in a number of interviews, exposing the flaws in every point of the indictment. As an Internet services intermediary, Megaupload diligently complied with takedown requests to remove infringing materials, and went even further to allow some 180 content-producing companies direct access to the servers to delete infringing materials themselves, which was unprecedented for any cloud storage provider. Despite never once having been sued by any movie studio or record company, the DOJ wants to hold Megaupload liable for infringement via third party cases of piracy by users – however there exists no federal criminal statute for secondary copyright infringement, so essentially they are trying to unlawfully apply civil law in a criminal law context. As Rothken has argued, the aggressive persecution of Kim Dotcom and other Megaupload founders has been full of “dirty tactics” by U.S. prosecutors.The prosecution’s case is essentially bogus. Kim’s lawyer Ira Rothken has picked apart the allegations in a number of interviews, exposing the flaws in every point of the indictment. As an Internet services intermediary, Megaupload diligently complied with takedown requests to remove infringing materials, and went even further to allow some 180 content-producing companies direct access to the servers to delete infringing materials themselves, which was unprecedented for any cloud storage provider. Despite never once having been sued by any movie studio or record company, the DOJ wants to hold Megaupload liable for infringement via third party cases of piracy by users – however there exists no federal criminal statute for secondary copyright infringement, so essentially they are trying to unlawfully apply civil law in a criminal law context. As Rothken has argued, the aggressive persecution of Kim Dotcom and other Megaupload founders has been full of “dirty tactics” by U.S. prosecutors.
Here is the indictment. Compare and contrast with what Amsterdam writes.
It alleges that although Dotcom and Megaupload took some actions to remove copyrighted material from their sites, it provided financial incentives for users to upload copyrighted material; failed to terminate access from known copyright infringers; made no significant efforts to identify or remove copyrighted material, or prevent it from being uploaded; impeded copyright holders from identifying those using the sites to upload copyrighted material; did not delete material they knew to be copyrighted, even after being informed by the copyright holder; complied selectively with obligations to remove copyrighted material, but failed to do so when it was in their financial incentive to do so; falsely represented to copyright holders that they had removed copyrighted material, when in fact they had only removed a subset of the links that provided access to that material; monitored law enforcement surveillance of Mega sites, and took active measures to conceal copyright infringement taking place on these sites; personally uploaded pirated copyrighted material; and on and on.
Let’s not pretend like we all fell off the cabbage truck. It is more than obvious that Megaupload was created to facilitate the uploading and distribution of pirated copyrighted material. That’s what it was used for. Megaupload profited from this by selling premium subscriptions and by selling advertising to those who visited the site to view copyrighted material. It’s not hard to connect the Dotcoms here, though Amsterdam pretends there are none to connect. Megaupload had a direct financial stake in facilitating the uploading and downloading of pirated material. That’s what brought people to the site. That’s what induced them to pay for premium subscriptions. That’s what brought the eyeballs that paid for the ads. That’s what the indictment alleges. That it was, in essence, a fence of stolen property. Intellectual property, yes, but property nonetheless-under United States law. (More on this below.) An entity that facilitated the marketing of stolen property, and made money for providing this service.
The indictment’s allegations flatly contradict Amsterdam’s claims that Dotcom and Megaupload were “diligent” in their efforts to protect copyrights. In contrast, the indictment alleges that these efforts were perfunctory, and intended to feign compliance as a means of covering a concerted scheme to facilitate the distribution of pirated copyrighted materials. Read some of the emails in the indictment. It is clear that Dotcom and the others indicted were aware that copyrighted material was being accessed via Mega, that making money off of providing access to these materials was the essence of their business model, and that they took some actions that gave the illusion of compliance while taking other actions to protect the business model. Sort of reminds one of a fence that runs a legit pawn shop on the side, and from time to time turns over stolen property to the cops.
It is interesting to note that Dotcom’s defense’s attempts to dismiss the charges focus on the very narrow issue of the service of the indictment on Megaupload, rather than the substance of the charges.
Let’s also not pretend that Kim Dotcom has no history. He has a very long and disreputable history, in fact. Hacker. Inside trader. Fraud. More than a history, a rapsheet-complete with a conviction. What’s more, he revels in his outlawry. Flaunts it, in fact. For going on two decades, he has reveled in breaking the law and profiting from it.
Dotcom also operates in a milieu that denies the legitimacy of most intellectual property law: some, in fact, deny the legitimacy of any IP law. These people rationalize that since it is costless to copy, copies should be costless. That is the socialism of the wired fool (or is it “efool” or “iFool”?). What is copied has to be created. If it is copied for free, it is far less likely to be created.
This is the fundamental tension in intellectual property. It is hard to balance the incentives, but these “copyleftists” (as Catherine Fitzpatrick trenchantly and accurately characterizes them) don’t even recognize there is any need to balance. This is, quite frankly, idiocy. I could give lectures on the subject. Oh. Wait. I have.
But the copyleftists self-righteously (how’s that for irony?) shriek that any attempt to constrain their ability to access IP is an unconscionable infringement of freedom. From this, it is a short step to rationalizing the taking of intellectual property. If you believe “(intellectual) property is theft” there is no moral bar against appropriating it-“liberating” it. And from there, it is a shorter step still to believing that any attempt to enforce intellectual property law is a gross injustice, and that the enforcers are the corrupt creatures of the real thieves-those who claim for themselves what should be freely available to everyone.
And that is exactly what Robert Amsterdam is buying into when he defends Dotcom. If you believe that copyright is legitimate property, and recognize that there laws-including criminal statutes-to protect this property, then you have to acknowledge there is a legitimate basis for the prosecution of Dotcom.
But in arguing that US prosecutors are the corrupt creatures of Chris Dodd and the movie industry, Amsterdam buys into the whole IP as theft meme. Lord knows I am no fan of the guy who put the Dodd into Frankendodd, but in this instance he is representing a legitimate interest that expects and deserves that its property be protected by law enforcement.
Let me put this another way. Amsterdam has been a vociferous critic of legal nihilism in Russia. With considerable justification, and I am in agreement with him on this. But Dotcom and his defenders are total legal nihilists. Some of the copyleftist community are nihilists on what they consider to be principled grounds: the IP is theft principle, to be specific. Aaron Swartz fell into this category. Dotcom is a legal nihilist for purely mercenary reasons: to support his .1 percent lifestyle. But the motive is not really material, even when it is materialistic. A nihilist is a nihilist. These people want to annihilate IP law. For different reasons, but they want to annihilate it. By signing onto the Dotcom defense Amsterdam is abetting the same legal nihilism that he excoriates in Russia. There are legitimate means to change the law: breaking it isn’t one of them.
There is further Russia-related irony here. Who has been among Dotcom’s most vociferous defenders? None other than The Media Outlet Formerly Known as Russia Today. Yes, that RT. The Kremlin agitprop operation. An operation that is, shall we say, hardly Khodorkovsky friendly, and which is the puppet of Khodorkovsky’s main tormentor: Vladimir Putin. RT loves-loves-Kim Dotcom. Mikhail Khodorkovsky, not so much. Does your strange bedfellow steal the covers, Robert?
And further the we-didn’t-fall-off-the-cabbage-truck theme. Russia is one of the main sources of pirated material, and one of the main consumers of pirated material. Each VKontakte user watches an average of 8.5 hours of video a month, virtually all of which is pirated. Russia is notorious for its IP piracy-and for the studied refusal of the government to do anything about it. Indeed, it is equally notorious that the security forces provide the krysha for all varieties of cybercrime, including piracy.
As the operator of the largest market for pirated material (and by market, I mean a venue where buyers and sellers can interact to engage in exchange), Kim Dotcom was in a highly symbiotic relationship with such types. Highly symbiotic: Dotcom provided a venue-an exchange, if you will-where these types could sell their ill-gotten goods, and made a very lucrative living by doing so.
Meaning this was not a Six Degrees of Kevin Bacon sort of association between Dotcom and the Russian security services. There are far fewer degrees of separation of Kim Dotcom from the very people who persecute (by his own characterization) Amsterdam’s most famous client: the client who propelled Amsterdam to international prominence (and large billings), yet who continues to rot in a jail cell in Chita. Losing any sleep with your new bedfellow, Robert?
One last point. Amsterdam makes a big deal out of the fact that Megaupload/Dotcom were “never sued by any movie studio or record company.” A similar claim is heard repeatedly in regards to JSTOR, MIT, and Aaron Swartz.
Please. Presumably Amsterdam makes this point to insinuate that the movie studios or record companies didn’t believe that Dotcom was costing them any business: if they did, why didn’t they sue? But how can he possibly reconcile this insinuation with his other claim: that the movie industry collectively pursued Dotcom with Javert-like obsessiveness? If movie companies were individually unharmed by Megaupload, why would they fund collective action to force the government to prosecute him? You can’t have it both ways.
Moreover, taken at face value, Amsterdam’s claim (and similar claims made regarding Swartz) would imply that there is no need for state civil or criminal enforcement of any property right. Just leave everything to private right of action. If that’s his position, I would like to hear his defense of it.
There are in fact strong arguments on the other side.
For one, economies of specialization in investigation and enforcement are one reason to have state enforcement.
Free rider problems are another. Indeed, the Dotcom case illustrates that point clearly.
Amsterdam mentions 180 content providers. The efforts of any one of these firms to force Megaupload to cease operations, or to operate in a way which protected IP, would redound to the benefit of the other 179. There is a public good problem/free rider problem here, and given this (severe) problem purely private enforcement leads to too little effort to enforce property rights. Public enforcement internalizes (at least partially) an externality.
It is interesting to consider what Amsterdam brings to this case. His law firm’s website does not disclose any experience in US criminal cases, or intellectual property law. Instead, it primarily touts its expertise in political defense and political advocacy. That’s quite telling, and of a piece with the efforts of copyleftists and the hacking underworld to politicize every attempt to enforce laws relating to copyright and computer security. There’s an old saying: if the law is on your side, argue the law. If the facts are on your side, argue the facts. If neither the law nor the facts are on your side, pound the table. In computer and IP related legal matters, the last sentence of the aphorism should be modified to read: “If neither the law nor the facts are on your side, pound the politics.” That is likely to be Amsterdam’s role in this case.
But in playing this role, he is associating with a very dubious character who facilitated massive theft, and profited therefrom. Making a political cause celebre of Dotcom will play well with Anons, the EFF crowd, the Googlesphere and others in the anti-IP precincts of the left. Precincts that are quite well-heeled, by the way, and spend large sums on political influence in order to advance their economic interest-just like the movie industry. But in so doing, Amsterdam gives ammunition to Putin and his ilk, who will no doubt smirkingly point to Dotcom and say that Amsterdam is willing to defend wealthy guilty-as-sin crooks by politicizing their cases-thereby discrediting his advocacy of Khodorkovsky. And they’ll have a point.