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Kim Dotcom: Mega File Site Signs Up 500,000

(c) Sky News 2013

Half a million users have already signed up to new file-sharing service Mega, its controversial founder Kim Dotcom has claimed.

The larger-than-life cyber pioneer - and founder of the now defunct Megaupload - launched the new site on Sunday at his New Zealand mansion.

Mr Dotcom said 500,000 users registered for the site in its first 14 hours, with some reports claiming that figure has now passed one million.

The new Dotcom site allegedly uses military-strength encryption and the former computer hacker insists the new 'cyberlocker' will operate legally and is not an affront to the film industry or the US government.

However, the global music industry has slammed the move, with the International Federation of the Phonographic Industry (IFPI) telling Sky News it would closely monitor the new cloud storage service.

"We will be watching closely to determine whether the new Mega service infringes our members' rights, particularly given that, according to our information, it has gone live without licensing content from many - if any - rights holders," a spokesman for IFPI told Sky.

"Megupload caused huge harm to music rights holders as one of the largest infringing sites in the world, depriving artists of over US$500 million, according to US authorities."

In January 2012, Mr Dotcom and three colleagues were arrested in a dawn raid at the sprawling multi-million dollar mansion he shares with his wife and five children in Coatesville, New Zealand.

Known as Operation Takedown, the swoop involved 76 armed police, special agents and helicopters.

The German-born internet tycoon was subsequently charged with online piracy after film producers in the US claimed Megaupload was being used to illegally share copyrighted material.

Mr Dotcom is currently fighting extradition to the US, a process that has been held up since New Zealand authorities declared the warrants used for the arrest were invalid.

He insists the new site complies with the law and he also warned that any attempt by the authorities to take it down would be futile.

"This is not some kind of finger to the US government or to Hollywood," Mr Dotcom said. "Legally, there's just nothing there that could be used to shut us down.

"This site is just as legitimate as Dropbox, Boxnet and other competitors," he added, referring to similar file sharing services.

Mr Dotcom also said the new site was different as it allows users to control access to their files, unlike Megaupload, where anyone could search for and download copyrighted material.

He claims the encryption system will also keep users' files safe from prying eyes and strip the site from liability of knowingly allowing users to distribute copyrighted films.

Mr Dotcom added that he will swiftly comply with requests to remove infringing material.

The launch party for the site featured a tongue-in-cheek re-enactment of the 2012 raid on his home, featuring 'police' abseiling down the side of his mansion and female guards in mini-skirts.

But some legal experts say it may be difficult for the site to claim it is being operated in good faith if Mr Dotcom does not even know what files are being stored on his servers.

The Motion Picture Association of America said encrypting files alone would not protect Mr Dotcom from liability.

"We'll reserve final judgment until we have a chance to analyse the new project," a spokesman said. "But given Kim Dotcom's history, count us as sceptical."

The IFPI spokesman told Sky News: "Our members are focused on licensing music to the hundreds of legitimate music offerings around the world. New and existing licensed services are rapidly expanding, offering downloads, streaming, music video and other ways to consumer music while rewarding creators.

"When Megaupload closed, piracy rates fell and many consumers went to legitimate services which offer all the music they want while respecting the rights of artists."

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