Legal Issues
AllOfMP3's legality is controversial. It is licensed in Russia by the Russian Organization for Multimedia and Digital Systems, a licence similar to agreements held by Russian radio stations. AllOfMP3 states that this agreement allows it to distribute music legally from all artists and all labels. This is disputed by most major record labels, which generally do not recognize ROMS or believe that it has the authority to distribute their works. AllOfMP3.com makes no claims as to its legality outside of Russia. However it is accessible to visitors in all countries.
In 2005, Moscow authorities began investigating the site as a result of a formal complaint from the International Federation of the Phonographic Industry (IFPI), who accused the site of "large-scale copyright infringement".
On June 1, 2006, the New York Times reported that US trade negotiators have warned Russia that the continued existence of AllOfMP3 could jeopardize Russia's entry into the World Trade Organization. This was reiterated by the United States Trade Representative Susan Schwab in remarks to the US Chamber of Commerce on September 28, 2006. She later told reporters that "I have a hard time imagining Russia becoming a member of the WTO and having a Web site like that up and running that is so clearly a violation of everyone's intellectual property rights."
Pressure from the IFPI resulted in AllOfMP3 being blocked by the Danish ISP, Tele2 in October 2006.
On December 18, 2006, the RIAA, on behalf of EMI, Sony BMG, Universal Music Group, and Warner Music Group filed a US$1.65 trillion lawsuit against the site. That equates to US$150,000 for each of 11 million songs downloaded between June to October 2006, and exceeds Russia's entire GDP. $150,000 is the statutory limit for copyright infringement awards in the United States. Allofmp3 responded to the lawsuit saying "AllofMP3 understands that several U.S. record label companies filed a lawsuit against Media Services in New York. This suit is unjustified as AllofMP3 does not operate in New York. Certainly the labels are free to file any suit they wish, despite knowing full well that AllofMP3 operates legally in Russia. In the mean time, AllofMP3 plans to continue to operate legally and comply with all Russian laws.".
In May 2007, UK police arrested a 25-year old man on fraud charges for selling allofmp3.com vouchers on sites such as eBay and allofmp3vouchers.co.uk. The man was reported to be funneling money from the sale of these vouchers back to the owners of the site in Russia. A statement in relation to this alleged transfer of funds to Russia was made by the British Phonographic Industry chairman.
In an interview with p2pnet, a MediaServices representative said "It is disappointing that United States Trade Representative Susan Schwab completely and deliberately mischaracterized AllofMP3.com. Furthermore, it is irresponsible to use AllofMP3.com as a negotiating instrument in an attempt to extract concessions from Russia in return for US support for accession to the World Trade Organization".
In July 2007, a Moscow court ruled that Visa's decision to cut off payments to allTunes was illegal.
In August 2007, Denis Kvasov, head of the company which owned AllofMP3.com, was acquitted of all charges stemming from copyright infringement prosecution. The prosecution was seen as a test case of Russia's commitment to fighting piracy, and was brought after EMI, NBC Universal and Time Warner lobbied for such prosecution.
In January 2008 The Register reported that MP3Sparks.com and its associated web sites were being hosted (since December 2007) by AbdAllah Internet, a Turkish web hosting service which allegedly provides safe harbour for spam and malware operations as well as having strong links to the Russian Business Network. For this reason access to the AbdAllah network is blocked by some ISPs, including all UK members of LINX, therefore blocking access to MP3Sparks as well.
On May 20, 2008, the RIAA dropped all copyright infringement charges against AllOfMP3.com.
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