

Kim Dotcom: US Government Is Protecting An Outdated Monopolistic Business Model - webandrew
http://torrentfreak.com/kim-dotcom-us-govt-is-protecting-an-outdated-monopolistic-business-model-120301/

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alan_cx
What I perceive from over here in the UK is that when the US government
protects failing business with money, its called "socialist" and evil.
However, when it protects failing business with law, that's just fine. Despite
the fact that these laws also cost a lot of money.

I would like to see the cost of policing and enforcing these laws over time,
compared to bailing out, say, General Motors. In fact, wont GM have to pay
that money back over time?

Personally, I find it odd that a US government will protect certain business
from natural competition. Isn't that anti-American? Anti-capitalism? Anti-
competition? Protectionist?

~~~
VonGuard
If even a small portion of the US' population had any idea what socialism
actually was, maybe we wouldn't all be going bankrupt from our asinine health
care system....

This country....

~~~
kiba
_If even a small portion of the US' population had any idea what socialism
actually was, maybe we wouldn't all be going bankrupt from our asinine health
care system...._

It's all about framing. "Safety net" versus "Wealth redistribution".

For the record, I prefer that the American adapt the McDonald business model
to medical care for increased safety and economy of scale. Copy what the
Indian did with eye surgery and heart surgery, not what the European did.

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trevelyan
A question in case grellas or any other brilliant HN lawyers are reading this
and care to comment -- assuming that Megaupload actually followed the DMCA as
Kim claims and there was nothing illegal about their operations, what sort of
remedies are available.

I mean... it seems the company is dead. Can they sue for damages? And if so
who pays? Do the courts recognize things like growth potential when they value
lost damages, and do they look at profits or just revenue? The reason I ask is
because I'm curisou what would happen if this were a smaller startup that was
strategically minimizing profits and perhaps even revenues in order to aim for
growth.

~~~
rprasad
Assuming that the actually followed the DMCA, they would have recourse in tort
law primarily for interference in contract, and malicious prosecution. There
are other torts, none of which they would be likely to succeed in pursuing.

In such case, the government would pay (but not the individual prosecutors, as
they are acting merely as agents of the government). Damages would be based on
economic harm actually proved, i.e., lost business from cancelled customer
contracts, lost ad revenue, etc. Future growth potential is not taken into
account for damages purposes.

However, note that MegaUpload did not follow the DMCA. Its entire business
plan was based on committing illegal activities, and was designed from the
outset to maximize the revenue generated by such activities over the revenue
generated by the potential legitimate uses of its services.

If you want a role model to follow in the media distribution market, look to
BitTorrent.

~~~
trevelyan
Thanks for the reply rprasad.

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blhack
What is most bizarre about this is that the US Government is going after a
German national who is currently living in New Zealand on behalf of a private
company [or group of them].

That's...kindof terrifying.

~~~
batista
A government protects two things: itself (the bureaucrats and politicians) and
their backers, bribers and friends (the private mega corporations).

In order to protect itself, though, it has to balance the demands of the
second, with what its' voters, the general public, wants.

That's why:

a) government is problematic

b) but it's still better than no/much-less government = big corporations rule
directly with their clout

~~~
carsongross
Another alternative: lots of small, independent governments.

For some reason, the big government schools and the big company media never
talk about that one.

~~~
batista
That's good too, but you have to have some way to tame big entities, like
mega-corps, that have much more power than any independent government.

For example, mega-corp says to the citizens of indi-govr1: "hey, guys, you
give me 100% tax break, and the ability to use materials bad for the
environment in my factory, or I take my business in another indi-govr".

Without some framework so that such things cannot happen in ANY indi-govr, you
are at the mercy of mega-corps...

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radu_floricica
The issue I see so rarely raised is who exactly is law designed to protect.

We can imagine a world where copyright is enforced they way content producers
want and everybody is a proper citizen and pays for music and movies.

We can also imagine a world where only commercial copyright is enforced (and
preferably for a limited time), and people are free to share music and movies.

The basic question is, "Which world do we want to live in?". It's a choice...
there is nothing fundamentally "right" or "wrong" about either. The
discussions about stealing and morality are completely besides the point. It's
all about consequences. Will expanding copyright make for a better world, or
is it just a reaction of the incumbent industry trying to protect its profits?
Will cutting copyright protection (definitely not destroying it) make things
easier for the little guy, protect human rights (like free speech and privacy)
and ultimately increase creativity, or will it cause a collapse of the
entertainment industry and lessen the available content?

We should be free to make this choice, vote on it and suffer the consequences.

------
Hyena
Even if that's correct, that doesn't mean that what Kim did wasn't illegal or
wrong. Kim wasn't simply engaged in "file sharing" he ran a multimillion
dollar parallel distribution system. He wasn't sharing, he was basically using
file sharers as a Mechanical Turk to scrape the Internet for content which he
then monetized at a large scale.

If you think Kim was in the right, then why not Amazon? your cable company?
Why does Valve even bother paying Bethesda a share? Etc. File sharing is
highly tolerable as a small enterprise, even if it is aggregately large; it's
not tolerable as a highly profitable business model.

~~~
kiba
_Even if that's correct, that doesn't mean that what Kim did wasn't illegal or
wrong. Kim wasn't simply engaged in "file sharing" he ran a multimillion
dollar parallel distribution system. He wasn't sharing, he was basically using
file sharers as a Mechanical Turk to scrape the Internet for content which he
then monetized at a large scale._

What he did was illegal, but not necessary wrong.

 _If you think Kim was in the right, then why not Amazon? your cable company?
Why does Valve even bother paying Bethesda a share? Etc. File sharing is
highly tolerable as a small enterprise, even if it is aggregately large; it's
not tolerable as a highly profitable business model._

I see it as increasing efficiency, but others see it as stealing.

~~~
jonhendry
"What he did was illegal, but not necessary wrong."

He wasn't stealing food to give it to the starving poor, he was helping
immature people get access to entertainment when waiting or doing without
would do them no harm at all. There's no moral high ground there. What he did
was illegal, _and_ wrong.

~~~
consumersurplus
Jesus didn't feed 5,000 with five loaves and two fish, he entertained 5,000
with five mp3s and two mp4s.

~~~
wanderingstan
Jesus was clearly stealing from the bakers and fishermen, who were robbed of
over 5000 bread and fish sales that day. Damn socialist.

------
benologist
And HN gets sucked in to torrentfreak again on this week's episode of Guy Says
Something You Like To Hear.

~~~
bryanlarsen
Downvoted not because I disagree with you but because you failed the
"meaningful contribution" test.

------
chrisbennet
Couldn't damages be gauged by comparing the injured party's income stream
before and after MegaUpload was shut down? If the parties suing are _really_
losing 13 billion in a 20 billion dollar industry, they should see an obvious
upward spike in profits now that that MegaUpload is shut down.

~~~
calloc
It will be very interesting to see whether or not there is an upward spike in
media purchased. Although I have a feeling that there will be none or close to
none and that any "spike" will be considered statistical noise.

------
J3L2404
From the article comments:

"This is the bottom line. Whether or not the business model is out-dated or
not has absolutely no effect on whether what Kim was doing was either immoral
or illegal.

In the Governments eyes, what Kim was doing illegal. I can't just steal
something from an Amish person's business because "their business model is
out-dated." It doesn't matter.

Unless Kim can prove that MegaUpload was actively taking down downloads as
requested my DMCA takedown requests, then he doesn't have much hope.

I'm a long time Torrent-Freak reader, and it hurts me to say this.
Torrentfreak has become a breeding ground extremists dedicated to the theft of
music and movies under the guise of a "moral" obligation/right to do them.
File-Sharing, such as giving my friend a CD I burned, is not file sharing in
the same sense as Torrenting something which is also being torrented by 400
other people. Think about if they DID buy that CD. That's $2,000 to the
artist. "

~~~
sophacles
1\. It is not stealing. This is well established. Stop using hyperbolic
language to hysterically whine and force your moralistic crap down our
throats.

2\. Your Amish analogy is a strawman.

3\. Whether Kim is breaking a law or not is not the point of this dicussion
(another strawman here): the discussion is does the (il)leagailty of it make
sense? Laws are not permanent nor are they absolute. We theoretically live in
a society that is based on the will of the people, so lets talk about what
make sense to our society.

4\. Amazing improbable thinking does not grant one rights to someone else's
pocketbook. Much like people should pay for stuff, by the same token, saying
they should then suing them for actions they didn't and may never have taken
is absurd. I should get paid $1 per read of this comment, there HN readers owe
me a few $K.

5\. Wow, I really fed this troll didn't I?

~~~
jonhendry
"Stop using hyperbolic language"

The main perpetrators of hyperbolic language on this topic are the people who
act as if there is some necessity and moral right behind downloading some crap
CD or movie or TV show, as if that was the same as stealing bread to feed a
family.

Guess what, you won't perish if you don't watch that TV show everyone is
talking about, or if you have to wait six months for that new movie to show up
on Netflix. The "harm" of doing without entertainment is no harm at all.

~~~
ssebro
Death and physical injury aren't the only ways someone can be harmed. Trust me
- if you're the only kid in highscool without cable who isn't able to talk
about that show from last night, you miss opportunities to bond. Those missed
bonds are worth quite a lot, since they directly impact your future.

~~~
batista
Those are "first world problems" of the first order.

The sense of entitlement and the notion of "harm" contained in the above
comment is just unbelievable.

How about real bloody issues, like being the only kid in highschool who's
parents can't afford medical coverage? Or sending him to college?

~~~
yummyfajitas
_"first world problems"...only kid in highschool who's parents can't afford
medical coverage? Or sending him to college?_

Those are also first world problems.

~~~
jonhendry
Affording medical treatment certainly isn't just a first world problem.

~~~
yummyfajitas
Affording US style comprehensive fancy coverage is a first world problem.

The various types of free "low quality" (by US standards) medicine available
in the US are far better than what you get in much of the third world.

