FIGHTING: Kim Dotcom and his co-accused are taking on the US government.

A former New York federal judge has waded into the Kim Dotcom saga saying it is "outrageous" the US government is refusing to give Megaupload users back their data.

In an article on wired.com Judge Abraham David Sofaer said he was "troubled" that the files of 66.6 million Megaupload customers were being kept as part of the US government case against Dotcom.

"It's really quite outrageous, frankly," he said.

"I was thinking the government hadn't learned to be discreet in its conduct in the digital world. This is a perfect example on how they are failing to apply traditional standards in the new context."

Sofaer has teamed up with the Electronic Frontier Foundation and is urging a US federal court to set up a system to allow Megaupload users to get back their legal content.

Dotcom, 38, is currently on bail in Auckland awaiting an extradition hearing following a raid on his Coatesville mansion in January.

Authorities say he used Megaupload and its affiliated sites to knowingly make money from pirated movies and games, and have charged him with multiple copyright offences.

He and Mathias Ortmann, Finn Batato and Bram van der Kolk are fighting moves to extradite them to the US.

Dotcom's arrest has raised concerns about the safety of content stored in cloud services - online storage space - Computerworld editor Sarah Putt said.

Users are increasingly turning to online storage systems such as Dropbox, Gmail, YouTube, iCloud, and Google Drive, to share and store their data.

"Data sovereignty is a concern to all consumers and it reinforces the need for consumers to back up their data on to an off-site area," Putt said.

"Just because you can put it in a cloud doesn't mean you can outsource your responsibility."

Putt said Megaupload was used by many small business owners because it was relatively inexpensive and easy to use.