PayPal has stopped processing payments for Kim Dotcom’s controversial cloud-based service Mega.
Launched in 2013 following the closure of Dotcom’s file-sharing site Megaupload, which was seized by US authorities for breaches of copyright, New Zealand-registered Mega claims to have more than 15 million users.
Dotcom says Mega, which uses encryption technology, is a legal business, but others see it as complicit in piracy. He has claimed PayPal’s decision came after pressure from Visa and Mastercard, in collusion with the film industry.
“Mega has demonstrated that it is as compliant with its legal obligations as USA cloud storage services operated by Google, Microsoft, Apple, Dropbox, Box, Spideroak etc, but PayPal has advised that Mega’s ‘unique encryption model’ presents an insurmountable difficulty,” he said. “The encryption models claimed by various USA and other entities apparently do not represent any problem to PayPal or the parties behind PayPal.”
Music Business Worldwide reports that Mega is temporarily not enforcing its storage limits and has extended existing subscriptions by two months free of charge until the company finds a new payment solution.