Controversial entrepreneur Kim Dotcom, the guy behind the now-shuttered MegaUpload, is at it again. He's got a new product, MegaChat, and a new boast: he claims MegaChat, an end-to-end encrypted voice and video chat service his company launched in beta yesterday, is a “Skype killer."

It’s unlikely Microsoft CEO Satya Nadella will see it that way — and frankly we don't either. But MegaChat is targeted at people who are wary of Skype’s security, so it may have a future.

Dotcom claims MegaChat offer users completely private video and voice calling with text and video conferencing slated to follow. And it proves something else, Dotcom tweeted:

'The Privacy Company'

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The private video call claim is a response widely publicized revelations by US National Security Agency (NSA) whistleblower Edward Snowden, who said Microsoft handed over encrypted messages from Microsoft users over to government investigators. MegaChat, Dotcom says, will be entirely secure from prying eyes.

Dotcom said he is releasing MegaChat "step-by-step," starting with video calling yesterday. Text chat and video conferencing will "follow soon,” he tweeted.

MegaChat does not require any software and operates off a web browser unlike most similar services. However, plugins for Chrome and Firefox are available for faster uploading and "added security."

But is it really secure? In 2013, passwords were stolen from Dotcom’s Mega website, which offers encrypted Internet communication and storage, leading security analysts to question whether the company can live up to its total security promises.

Dotcom has responded by offering a bounty to anyone that can detect security flaws and rewards those who report bugs in the system.

What About Dotcom

The timing of the release is interesting. It comes almost three years to the day after Dotcom’s minions in New Zealand were raided by armed police and his MegaUpload website closed down.

At first impressions at least, what Dotcom is offering here doesn’t really appear to be a viable competitor to Skype, even if you exclude the fact that Skype is now firmly embedded in the Microsoft ecosystem. That is not to say that there shouldn’t be a real alternative to Skype or that one won’t emerge.

But realistically, the question must be asked: Would you trust Dotcom or his company with your data?

Dotcom’s background is far from pristine. In 1994, he was convicted of computer fraud and data espionage, among other crimes, and in 2003, he was convicted of insider trading and embezzlement.

In January 2012, the New Zealand Police placed him in custody in response to US charges of criminal copyright infringement in response to MegaUpload website and alleged pirated content from the film industry.

Privacy Wars

There are all kinds of arguments for and against what he did and what has happened subsequently. But the question of trust — or not — remains.

Even so, if Dotcom can convince users that he can keep their information secure and encrypted, then there should be some kind of audience for his platform. That is especially true because it has just emerged that the European Union counter-terrorism chief wants regulators to force companies in the EU to hand over encryption keys.

In a document leaked to the civil liberties group Statewatch, Gilles de Kerchove, director of Justice and Home Affairs at the EU, said encryption is making information interception impossible. The letter is worth reading in its entirety for the light it sheds on the current position of EU lawmakers on data tracking and sharing, but on encryption it has this to say:

Since the Snowden revelations, Internet and telecommunications companies have started to use de-centralized encryption, which increasingly makes lawful interception by the relevant national authorities technically difficult or even impossible.

The [EU] Commission should be invited to explore rules obliging Internet and telecommunications companies operating in the EU to provide under certain conditions as set out in the relevant national laws and in full compliance with fundamental rights access of the relevant national authorities to communications (i.e. share encryption keys)."

In both the US and the EU there will be considerable opposition to this. For that reason alone, Dotcom is likely to gain ground with MegaChat. The platform uses User Controlled Encryption (UCE), a system whereby users are given a decryption key, which they in turn send to people with whom they want to share files.

MegaChat doesn’t have the same muscle that Skype does, because it lacks Microsoft’s clout. But it could have a future, especially if the data privacy row that that is bubbling away in the background blows-up as it seems certain to do, sooner or later.