US labels sue Russian music site

A group of American record labels has started legal action against the Russian music download site Allofmp3.com, after alleging it is selling songs without permission.

The Moscow-based Mediaservices, which runs the website, is being sued by the labels. The site is already facing legal action from the British Phonographic Industry (BPI) on behalf of UK record companies.

The UK labels claim that the site is offering songs for sale without permission, but Allofmp3.com says it pays royalties to the Russian licensing body, Roms.

The lawsuit has been filed in New York on behalf of Arista Records, Warner Bros, Capitol and UMG recordings. They claim the Russian licensing group has no authority to collect and distribute royalties.

Allofmp3 sells albums for less than £1 and charges pennies for songs. The world's most popular music download service, iTunes, charges about £6 per album.

Papers filed as part of the legal action say: "The defendant's entire business... amounts to nothing more than a massive infringement of plaintiffs' exclusive rights under the Copyright Act and New York law."

Visa and MasterCard have stopped accepting credit card transactions for purchases made at Mediaservices' sites.

Allofmp3 claimed it pays royalties to Roms, which granted it a licence to operate. Roms said the Russian constitution grants the right to license music to Allofmp3, even if it had not obtained permission from the copyright holders. It also claimed it collects royalty payments from the download site on behalf of record companies and artists.

Oleg Nezus, general director of Roms, said the site's activity was "legitimate". He added: "The opinion of foreign copyright owners is just that - opinion."

The BPI and the International Federation of the Phonographic Industries have previously said Roms has "no rights from the record companies whatsoever to license these pieces of music".

The site accounts for 14 per cent of UK downloads.