Following the recent shutdown of file-sharing portal MegaUpload, US authorities have filed extradition papers against the site’s founder – the oddly named Kim Dotcom. His evidently high position in the US government’s list of priorities (after all, the Middle East is rather less than stable right now – and a US General Election is due) says much about the growing importance of founder-managers who rely on copyright abuse as a business model.

Dotcom is currently hiding out in New Zealand while US enforcement agencies work out ways of getting him to face the music – a situation that gives him the roguish allure of a lone crusader on the run from a faceless bureaucracy. Even his name is a tech-friendly alias; he was born Kim Schmitz in 1974, and in the late 1990s used the aliases “Kimble” and “Kim Tim Jim Vestor” during early escapades in digital fraud (reselling calling-card numbers bought from computer hackers) and online piracy. Undeterred by his subsequent convictions, he remained a high roller, and was later found guilty of insider trading and embezzlement during his supposed role as angel investor of the failing website LetsBuyIt.com – an incident that only enhanced his cinematic glamour.

None of the dubious credentials he established prevented him from steering MegaUpload to total revenues of $175m.

The right to Party

One of Dotcom’s closest contemporaries is Rickard Falkvinge: founder of global political movement the Pirate Party. His brainchild – which now has branches in locations as remote as Peru and Kazakhstan – came to public attention when it swung to the defence of non-profit media website The Pirate Bay. Unlike MegaUpload, The Pirate Bay did not host illegally procured content – it merely provided users with links to other online resources that did.

Regardless of that subtle technicality, the site found itself on the receiving end of tough legal action from the courts in its native Sweden, after the country’s government was blitzed by extensive lobbying from record labels, software developers and film studios – all of whom felt that, by providing access to ripped-off versions of their products, the site had effectively encouraged copyright infringement. Despite the prison sentences handed down to the site’s founders in April 2009, The Pirate Bay vowed to continue – and is still active to this day, with considerable support from the Pirate Party.

Like Dotcom, Falkvinge has traded himself on an alias. Under his real name Dick Augustsson, he worked as an IT professional, before turning his energies to the creation of a political party that existed to dispute the central tenets of intellectual property laws. In the party’s eyes, the rise of file sharing means that there is no longer such a thing as authorship, or indeed copyright. As a result of that view – which has appealed to internet users who want to share data freely – the Pirate Party won 18 seats in the German electoral district of Berlin last year: a significant achievement for a rebellious, single-issue party.

They fought the law

So, Dotcom and Falkvinge are really two parts of the same pincer movement. On one hand, we have a reckless – and de facto criminal – individual who happens to have a devastating talent for seizing opportunities provided by basic web functions, to the extent that he monetises them to kingdom come before anyone has had a chance to work out what he’s doing. On the other, there is the activist figurehead of a global movement that is seeking to legitimise – or at least downplay the illegality of – the very things that Dotcom is being extradited for.

The unpleasant lesson from this revolution appears to be that anyone with the required technical know-how can become an internet entrepreneur, as long as they’re prepared to completely ignore certain inconveniences – such as the law.

We have come a long way from the furore that erupted in 2000 when Metallica sued Napster and its trailblazing founder-manager Shawn Fanning, after a song by the band cropped up in the site’s file listings and was quickly distributed by fans. Now it’s as though making money out of online piracy is such a sitting duck that you may as well do it for short-term gain. If you scoop up $175m in revenue, surely you’ll have a few pennies in the bank once your sentence expires, right?

But doesn’t it all come down to the old Jurassic Park argument: just because you can do something, does that mean that you should?

For more PM articles on business ethics, see our articles on whistleblowing here and here

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Image of Kim Dotcom courtesy of Andreas Bohnenstengel