In my second post about the new MEGA encrypted file service I discussed the chess game that Kim Dotcom was playing with the policers of copyright. Dotcom designed the system, "So it doesn’t know what you are storing on its servers and it can’t find out." Pretty clever, eh? So I asked, "Is this a checkmate from the legal standpoint?" I answered my own question, "Not so fast." MEGA, of course, is not operating in a vacuum: The whole system can still be undone by its users, who have the power to share their files and the encryption keys to those files as they choose. Even though the terms of service strictly forbid uploading and distributing copyrighted material, users routinely ignore TOS—especially for a site whose lineage involves infringement on a massive scale. If users are sloppy with their links and post them to public sites that index pirated material, MEGA could face clear external evidence of what is on its servers—even if it cannot see the files itself.
