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Last Updated: Friday, 9 June 2006, 11:35 GMT 12:35 UK
'Illegal' MP3 site defends itself
By Mark Savage
Entertainment reporter, BBC News

The website offers more than 300,000 tracks
Russian music download website allofmp3.com has defended itself against accusations of piracy.

In a statement, the site's owners said they operate "in full compliance with all Russian laws".

However, the British Phonographic Industry trade group insisted that the site is "illegal" and "categorically in breach of copyright laws".

The BPI plans to sue allofmp3.com in the UK courts, but says individual users will not be prosecuted.

The Russian website accounts for 14% of downloads in the UK, a survey has said. It sells albums for as little as 1.

No money flows back to artists or record companies in the UK
Matt Phillips, BPI
"They offer lower prices because they don't pay anyone," says BPI spokesman Matt Phillips.

In its statement allofmp3.com said it "regularly transfers substantial amounts of royalties" to Russian copyright organisations.

Mr Phillips disagrees, saying "no money flows back to artists or record companies in the UK".

Licence problems

The opinion of foreign copyright owners is just that - their opinion
Oleg Nezus, ROMS
The controversy appears to centre around an organisation called Roms, which granted allofmp3.com its licence to operate.

Roms says the Russian constitution gives it the right to license music to allofmp3.com, even if it has not obtained permission from the copyright holders.

It also claims to collect royalty payments from the download site on behalf of record companies and artists.

"Allofmp3.com's activity is quite legitimate," said Roms general director Oleg Nezus.

"The opinion of foreign copyright owners is just that - their opinion," he told BBC Russian.com.

Gnarls Barkley
The website sells Gnarls Barkley's number one album for around 58p
But the International Federation of the Phonographic Industries (IFPI) says Roms has "no rights from the record companies whatsoever to license these pieces of music".

International law

The IFPI warns consumers that even if Roms was a legitimate organisation, which it believes it is not, it would still be illegal to download songs from allofmp3.com outside of Russia.

"Allofmp3.com clearly violates rules enshrined in national copyright laws and international copyright treaties," it says.

In its statement, allofmp3.com says it "is not operating or advertising its business on the territory of other countries".

It has to abide by our laws
Struan Thomas, E-commerce lawyer
E-commerce lawyer Struan Robertson says this is not enough to protect the website from legal action.

"If a website wants to avoid being subject to the laws of another country, it has to take steps not to sell in that country," said Robertson, who is a senior associate with international law firm Pinsent Masons.

"As soon as a website targets British consumers and is knowingly selling to British consumers it has to comply with British law."

In a disclaimer on its website, allofmp3.com says it "does not possess information on the laws of each particular country and is not responsible for the actions of foreign users".

"It's not enough to bury in the terms and conditions some sort of disclaimer saying you have to check your own country's laws," says Robertson.

The BPI says record companies get no money from the website
"It has to abide by our laws."

Practical difficulties

However, he says, the recording industry may have difficulty in shutting down the website.

"The problem the BPI has is that it might win a court judgment in Britain and then have enormous practical difficulties enforcing that in Moscow."

The IFPI has already encountered this problem, losing a legal case against allofmp3.com in Russia last year.

The organisation asked Russian authorities to take action against the download site, citing breach of copyright, in February 2005.

But Moscow prosecutors decided not to pursue the case because Russian copyright laws do not cover digital media, reported the news agency Tass.

However, the IFPI says it vowed to fight that decision, and says it is behind two current criminal proceedings against allofmp3.com in Russia.

The only thing the BPI and IFPI have done is succeeded in tripling the traffic to the website
Greig Harper, Industry analyst
A former director of the website currently faces trial in Moscow.

A second case, concerning a current director of the company, is being investigated by Russian prosecutors.

But experts say the recent news stories about allofmp3.com may actually be good news for the website.

"The only thing the BPI and IFPI have done is succeeded in tripling the traffic to the website," says Grieg Harper of music industry analysts XTN Data.

"It's doing the exact opposite of what they want to achieve."

However, Matt Phillips says the BPI hopes consumers will get the message that they should avoid allofmp3.com.

"The long-term goal is to prevent a website selling music illegally in the UK."

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