A chain of US music companies has initiated legal action against Russian-based Mediaservices Inc., which runs download sites Allofmp3.com and AllTunes.com. The lawsuit filed by Arista Records, Warner Bros, UMG, and Capitol Records claims that the sites are selling songs without permission. But Allofmp3.com contends it is paying royalties to a Russian licensing body called Roms. Roms says the Russian constitution gives it the right to license music to allofmp3.com, even if it has not secured permission from the copyright holders. It also claims to collect royalty payments from the download site on behalf of record companies and artists.
The music industry says that the Russian licensing group does not have the authority to collect and distribute royalties.
Allofmp3.com sells albums for about $1 and charges only a few cents for songs. By contrast, one of the world’s most popular music download service, iTunes, charges $10 for an album. Visa and MasterCard have reportedly stopped accepting credit card transactions for purchases made at Mediaservices sites.