The controversy over AllofMP3.com threatens to be a stumbling block in one of post-Soviet Russia’s final stages of transformation from communism to capitalism: a long-sought membership in the World Trade Organization. Russia remains the only major world economy not a member of the global trade body. The Kremlin has been negotiating membership since 1993.
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 After winning major legal battles to prevent unauthorized file-sharing on the Internet, the music industry may finally have met its match in a Russian Web site that seems unstoppable.The site, AllofMP3.com, offers chart toppers like Justin Timberlake and Beck for as low as 15 cents a song and $2.47 an album — and now has a plan to distribute music for free. Its low prices have made it a global hit with 5.5 million subscribers from America to Japan who sign on to download songs ranging from classic rock to Tchaikovsky.In contrast, the world’s most popular online music store, Apple Computer Inc.’s iTunes, sells singles for 99 cents each and most albums for $9.99.Anti-piracy groups and music industry leaders accuse AllofMP3.com of copyright infringements and say the Moscow-based Web site is able to sell music so cheap because the site is not paying royalties to recording labels and artists.Critics of AllofMP3.com blame Russia’s lack of enforcement of intellectual property rights, particularly when it comes to the Internet.The accusations led major credit card companies Visa and MasterCard to announce this month they had suspended services to the site. The company that runs the Web site called the move “arbitrary, capricious and discriminatory.”The controversy over the music site also threatens to be a stumbling block in one of post-Soviet Russia’s final stages of transformation from communism to capitalism: a long-sought membership in the World Trade Organization. Russia remains the only major world economy not a member of the global trade body. The Kremlin has been negotiating membership since 1993.”I have a hard time imagining Russia being a member of the WTO with a Web site like that in operation,” Susan Schwab, the U.S.Trade Representative, told reporters in Washington earlier this month. Schwab called on Russian authorities to shut down AllofMP3.com.Russian officials have been silent about the criticism against AllofMP3.com, while users of the site remain enthusiastic about the service.Mediaservices Inc., the parent company of AllofMP3.com, says the site adheres to Russian law. The site pays 15 percent of its sales revenues to the Russian Organization for Multimedia and Digital Systems, a royalty collection agency known by its Russian acronym of ROMS. A ROMS official said the organization pays royalties to international copyright holders and artists groups.But representative groups of major recording labels like the International Federation of the Phonographic Industry don’t recognize ROMS, claiming the Russian body doesn’t obtain permission to use the material it sells. Several artists groups have declined to take payment from ROMS, saying they weren’t “satisfied with the sum,” according to ROMS director Oleg Nezus. |
