Visa Cuts Off Payments to Russian Music Download Site AllofMP3.com

Authored by Mark Hefflinger on October 18, 2006 - 1:52pm.

San Francisco - Adding teeth to recent calls from the U.S. Trade Representative to shut down what the U.S. calls an illegal music download service, credit card company Visa announced on Wednesday that it has stopped processing payments to Russian music site AllofMP3.com, the International Herald Tribune reported. "It's no longer permitted to accept Visa cards," Simon Barker, a Visa International spokesman told CNET News.com. "The action we've taken is in line with legislation passed in Russia and international copyright law." AllofMP3.com sells digital albums for about $2 each -- far less than the $9.99 standard at iTunes and other retailers -- and has maintained that its site is licensed by a Russian copyrights society and conforms to Russian laws. However, U.S. Trade Representative Susan Schwab has targeted the site as a piracy haven, and in recent comments has suggested the site could jeopardize Russia's entry to the World Trade Organization. AllofMP3 on Tuesday for the first time went on the offensive, holding a virtual press conference for U.S. reporters during which it defended its license from the Russian Multimedia and Internet Society, which the company says sets aside 15% of revenue to pay artists. The recording industry disputed this claim. "Allofmp3.com summoned the world's media to specifically address the issue of their legality -- but all they did was duck the questions time and again. Allofmp3.com's claims to legality are false and spurious," said John Kennedy, chairman and CEO of the International Federation of the Phonographic Industry. In a signal it may be responding to mounting pressures, AllofMP3.com said on Tuesday that it plans to adopt an ad-supported model where it would offer downloads for free.
http://iht.com/articles/2006/10/18/yourmoney/music.php
http://www.ifpi.org/site-content/press/20061018.html
http://tinyurl.com/ybp5e8 (CNET)
http://www.businessweek.com/ap/financialnews/D8KQOFIO0.htm (AP)
http://www.allofmp3.com