AdultKing

No one group or person usually makes anything of the complexity of these issues happen single handedly, if you think that then you're naive. Sometimes we are able to single handedly cause action, as we did with Paypal and Hotfile, because we can build an overwhelming case. However this is the exception rather than the rule.

We were the first group to take action against Mega, having several of their resellers terminated just days after Mega opened their doors.

Pirates beware: Kim Dotcom'''s Mega isn'''t the safe haven he says it is | The Verge

Dotcom's Mega: Anti-Piracy Group Moves To Cut Off Site's Finances | TorrentFreak

Mega responded by introducing policies and structuring themselves in such a way that took away the barriers to the use of Paypal as a payment method. Since then we, along with the two major card associations and other IP lobby groups have been working independently to make a case that Mega should not use Paypal.

More recently the Digital Citizens Alliance, with the collaboration of NetNames, released a report which listed Mega as one of the worst offenders in the File Hosting space. Digital Citizens Alliance

While I cannot speak for other organisations, from the perspective of Adult IP our work focussed on three areas, which I am now happy to talk about publicly.

The first was that despite Mega imposing a stringent DMCA policy, there was still a massive amount of infringement on the website.

The second was the issue of encryption and de-duplication. Mega has stated publicly that it de-duplicates files. It is also known to use strong encryption. Our testing showed that if two users uploaded the exact same file and then a DMCA notice was issued on one of them then only that one instance of the file would be removed and the other would remain. Now if Mega was indeed de-duplicating why weren't both infringing files automatically removed ?

The third issue was that of encryption. If it is true that Mega have no way of knowing what resides on their servers then how can they properly assess copyright infringement or other illicit activity ? Without the ability to monitor their own service they have no way of managing the various compliance issues that come in to play.

For quite a while, Paypal as a company which embraces innovation and technology, allowed Paypal to process payments through them. Throughout all this time we, along with other stakeholders in the IP space lobbied Paypal to stop doing that. I know that I had several long meetings with senior executives at Paypal discussing the way forward on the issue of Mega.

I would only be speculating to know exactly what caused Paypal to reverse it's thinking and position on Mega. I think in the end it was probably the card associations that forced Paypal's hand. Paypal for all it's size and influence still need to maintain a positive relationship with Visa and MasterCard.

What escapes most people is that these issues are extremely complex and often they can take many months if not years to work through. There is no silver bullet when dealing with large players in the file locker space as there are numerous competing legal, financial and regulatory issues to grapple with.

That said I received word from Paypal this morning that they have already exited all but one of Mega's resellers and the last one will be actioned today.