AllofMP3 Fights Critics, Loses Visa

After months of being criticized both in the press and among music industry executives, Russian music service shot back Tuesday, saying its business is legitimate. It charged that it has attempted to compensate the record industry, but has been turned down.

AllofMP3's owner Mediaservices pays the Russian Multimedia and Internet Society a 15 percent cut of its sales, it claims. RMIS has attempted to pay the record companies the royalties, but the record companies have refused to take the money.

The record industry maintains that the licensing group has no right to collect or distribute royalties. However, AllofMP3 counters that by paying the group, the site operates within Russian laws. Typically, song downloads cost just pennies per track with full albums retailing for as little as $1 or less.

A slew of record industry organizations including the RIAA and IFPI claim that AllofMP3 is making millions by ripping off artists and consumers, who believe they are purchasing their music legitimately. Authorized services such as Apple's iTunes and Real Rhapsody charge at least 10 times as much for music downloads.

To fight these claims, Mediaservices held a press conference in Washington, D.C. Wednesday to publicly refute claims of piracy. Company Director Vadim Mamotin told reporters through a translator that "nothing could be further from the truth" when its critics call it a bastion for piracy.

Additionally, Mamotin rebuffed claims that his site is preventing Russia's entry into the World Trade Organization, although the U.S. Government has specifically fingered AllofMP3 as one of the reasons to hold up the country's entry into the trade body.

What still remains unclear is AllofMP3's profits or royalty payments. Officials refused to disclose that information at the press conference.

In related news, Visa said Wednesday that it was stripping AllofMP3 of the ability to take Visa credit cards. The company said its move was to comply with recent Russian legislation and international copyright law.

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