Megaupload founder Kim Dotcom would not get a fair trial in the "unfair playing ground" of the U.S. where he faces copyright infringement and racketeering charges, his lawyer told CNBC on Monday.
German-born Dotcom is currently appealing a ruling by a New Zealand district judge last year that he could be extradited to the U.S. to face charges. The appeal case kicked off Monday and is the latest in a dramatic saga which began when Dotcom's Auckland home was raided by New Zealand police in 2012.
Since then, Dotcom and his co-founders Mathias Ortmann, Bram van der Kolk, and Finn Batato, have been accused of internet piracy - racketeering, money laundering, copyright infringement and a number of other charges - by U.S. authorities related to Megaupload, a cloud-based file hosting site which was shut down in 2012.
Dotcom denies all of the charges. But when his lawyer, Ira Rothken, was asked why Dotcom won't just go and defend himself in the U.S., he replied that the internet entrepreneur would not be treated fairly.
"We don't believe that we can actually get a fair trial in the United States," Rothken told CNBC in a TV interview on Monday.
"I'm not going to say there is something crooked about the U.S. legal system. But if you take a look at this case, there are a lot of things going on right now where it appears where the United States just want to win rather than do justice," he said, adding that the U.S. is "an unfair playing ground for this type of case".
The U.S. Federal Bureau of Investigation (FBI) claims that Megaupload has cost copyright owners $500 million while the site has generated more than $175 million. The U.S. has called Dotcom a fugitive and invoked a law that has allowed them to freeze his assets held abroad. Rothken called this law "draconian" and said it means that if Dotcom ever went to the U.S., "he'll have no money in which to defend himself in the largest criminal copyright case in history".
Under New Zealand law, if someone else uses your website or network to infringe copyright, then you are not deemed to have infringed copyright. This "safe harbor" in New Zealand is being used by Rothken to defend Dotcom.
Rothken said that should he lose this hearing however, Dotcom will appeal to another court in Wellington, New Zealand, and then the country's Supreme Court if it goes that far.
Dotcom has received the support of other companies, Rothken said without disclosing names, but added that he expects other cloud storage providers such as Google and Dropbox to back Megaupload's founder.
If Dotcom loses the case, Rothken warned that it could stifle innovation in the cloud sector.
"Here this is the first time a cloud storage provider is being prosecuted criminally and they could lose their freedom. So we believe that this could lead to investor money drying up, start-ups never getting off the ground, and Google and Facebook and Dropbox having shackles on them. It's a very serious economic situation for these companies," Rothken told CNBC.
"The second you put a cloud storage site on the internet, whether it's Google or Megaupload, there's going to be good users and bad users. There's going to be folks who are going to infringe, there are going to be folks who are saving wedding photos and using that for fair use. There's no way a cloud storage provider can be held criminally responsible for the bad stuff. That would not allow for any cloud storage site to ever get off the ground. So we have very important social, legal and economic issues in this case."
Dotcom's appeal hearing is due to last around six weeks.