Labels Sue www.allofmp3.com By Wes Phillips December 23, 2006 — A cabal of record labels—including Arista Records, Warner Bros., Capitol, and BMG—have taken legal action against the Russian music site allofmp3.com, charging that the site offers their music without having received permission. The suit, filed in federal court in New York, is only the latest step in the war against the Russian digital download site.

Allofmp3.com was established in 2000 and charges just a few cents per song, with whole albums for under $1, compared with the iTunes Music Store rate of 99¢/song. In addition to being so inexpensive, allofmp3's downloads do not contain DRM. The site claims its activities are legal under Russian law, citing its compliance with the Russian Organization on Collective Management of Rights of Authors and Other Rightholders in Multimedia, Digital Networks & Visual Arts (ROMS).

ROMS is not considered legitimate outside of Russia, however, because it doesn't consult the copyright holders on the use of their copyrighted material.

In October 2006, Mastercard and Visa stopped processing charges for Mediaservices, allofmp3's parent company.

In November, the Office of the United States Trade Representative issued a report, "Results of Bilateral Negotiations on Russia's Accession to the World Trade Organization (WTO)", which began: "The United States and Russia have agreed on a binding blueprint for actions that Russia will take to address piracy and counterfeiting and improve protection and enforcement of intellectual property rights (IPR), both stated priorities of the Russian Government, starting immediately." In other words, the US essentially demanded Russia's cooperation on, among other things, the closing down of websites like www.allofmp3.com that do not obtain rights-holder consent.

Noncompliance, the US Trade Representative said, could threaten Russia's chances to join the World Trade Organization.

Does the new suit spell the death of allofmp3? That's hard to say. The company itself loudly proclaims its legality on its Press Center page—but what else would it say? Furthermore, the site seems to keep ticking and ticking, even after taking lickings from credit card companies, national trade organizations, the RIAA, and IFPI. That's probably because somebody's making a ton of money from it.

No, that somebody does not seem to be the creators of the intellectual property being traded, which strikes me as just plain wrong. However, the site's popularity may have to do with more than just cheap music—many users cited the ease and transportability of the non-DRMed files as major reasons for buying from allofmp3. Perhaps the labels could learn some useful lessons from the outlaws.