Tech Law

File-Sharing’s Cloudy Future

Last month Megaupload founder Kim Dotcom, who is facing charges in the United States for engaging in digital piracy, announced that he would relocate a new version of his site,, outside the United States.

The belief was that this would free him from coming under fire by U.S. law enforcement, but Gabon — which controls the “.ga” domain — has already suspended it. This comes after other torrent and file-sharing sites have been shut down by local ISPs. The Pirate Bay, a high-profile sharing site, has been banned or otherwise blocked in a dozen nations including Sweden, the UK, the Netherlands, Finland and Ireland.

Still, file sharers are trying to stay one step ahead of the law, oftentimes with users hiding their IP-addresses as a response to antipiracy initiatives.

“What we’ve seen are that the efforts to block peer-to-peer file sharing, even as it moves to cloud computing, [are like] a game of whack-a-mole,” said Julie Samuels, a staff attorney with the Electronic Frontier Foundation. “People will find a way to use new technology to share what they want to share.”

A Mega Headache

One of the most notorious file-sharers — pirate to some, innovator to others — is Kim Dotcom, formerly Kim Schmitz. He recently announced that he would move the Megaupload servers completely outside of the United States — and moreover, encrypt everything.

It’s questionable whether this approach will indeed be enough to get file-sharers a pass.

“It is difficult to say. It certainly is a good start,” said Chet Wisniewski, senior security advisor at Sophos Labs.

However, given that the United States was able to win approval of a request to extradite TV-Shack founder Richard O’Dwyer from the UK this part March, the reach of Uncle Sam could be virtually limitless, Wisniewski told TechNewsWorld.

The case is pending appeal.

Up in the Cloud

A possibility for the future of file-sharing could be a move to the cloud, and this will likely only increase the whack-a-mole game between copyright holders and file-sharers.

“Torrent sites moving to the cloud will make instant takedown more difficult, but not impossible,” Wisniewski said. “The question that remains is whether using the cloud to stay ahead of law enforcement is the right way to solve our problems.”

Is compromise an available option?

“Instead of misguided legislation, we need to create incentives where there can be a business model that pays the content owners and provides the consumer with a way to get the content,” said Samuels. “With this, people are getting paid for what they do, and people can get legal access to what they want.”

Cloudy Issues

Whether the cloud will provide that business model is far from certain, but what is likely to happen is that the legislation and new laws will likely only hurt technological development, which in turn will hurt the content creators who often thrive with new distribution methods.

“So many people in the content industry seem to be willing to cause harm to this exciting technology so that they can squeeze a bit more out of the current business models,” Samuels observed.

The issue of hosting outside the United States likely isn’t going to be good for American innovation.

“It seems that the United States is in fact pushing a regime of intellectual property laws that offer incentives to companies to host offshore, and I’m concerned for what means for the economy,” Samuels stressed. “We should want to protect those who create new technologies despite what users may or may not be doing.”

Cryptic Messages as Well

Dotcom’s new and other file-sharing ventures are planning to encrypt data so that they can claim no knowledge of what a transfer contains. Would this be enough to protect file-sharing services?

“Congress has created laws that protect service providers,” said Samuels. “Otherwise, it could create a world where no one would want to host cloud storage because of liability. That is a good decision. That is a good compromise. It is a good policy.”

However, encryption itself remains a sticky side point in the United States, especially since 9/11 — and the laws might only make it worse.

“This comes down to the privacy rights of individuals and companies, and the incredible investigative power the United States has since the Patriot Act,” said Rob Enderle, principal analyst at the Enderle Group. “This doesn’t address the fact that what is being done may be illegal, but it does make it far harder to get evidence without committing a crime to get it by the media industries.”

There are few encryption schemes that can keep a government out for long, and once a law enforcement agency sees evidence of a crime, even if it isn’t the crime they are looking for, they tend to report it — and that would then lead to an arrest or fine, Enderle told TechNewsWorld.

Breaking Censorship

At the other end of the spectrum is the notion that file-sharing, with the use of encryption, could also allow for freedom of information — notably in nations with strict, even draconian, censorship laws. In such cases, it isn’t about the sharing of files — it’s about the sharing of information and ideas.

The question here is that if governments can find evidence of violations, as noted above, file-sharing and encryption might not be the most reliable methods for protecting the identities of senders.

“Do torrent sites offer advantages in getting information to countries with strict censorship laws?” Wiseniewski asked. “Potentially, but the same technology being used to prove you are a criminal for downloading Mad Men can be used to prove activity among dissidents. I certainly would not rely on torrent technology to protect my identity or activities from prying eyes.”

Nor would such a move come easily. While file-sharing is a dirty word to many, it is likely something that the content creators will have to get on board with. Just like other technologies that were feared — from recorded music to the VCR to the MP3 — this just suggests the times are changing.

“This is a hard process because it creates disruption,” said Samuels. “We should welcome the disruption because it doesn’t just benefit those sharing files, but results in technology that makes a difference … around the world.”

Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from RosenPublishing.

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