- The Washington Times - Sunday, October 1, 2006

MOSCOW — It’s slick, easy to use and, most of all, ridiculously cheap.

But anti-piracy groups are hoping that a law that took effect last month will shut down Allofmp3.com, a notorious Russian Web site that has become one of the most popular destinations worldwide for music downloaders.

Allofmp3 offers song downloads for as little as a penny and has an extensive back catalog of music ranging from classic jazz to the latest pop.

Bob Dylan’s new album, “Modern Times,” is selling on the site for $2.51, compared with a $9.90 price tag on Apple’s ITunes.

The site won’t disclose how many people are using it, but analysts say hundreds of thousands are logging on every month from North America and Europe.

“Allofmp3.com are the most arrogant and aggressive copyright violators that we know of,” said Igor Pozhitkov, the Russian director of the International Federation of the Phonographic Industry, a group that represents recording giants such as Universal, Sony, Warner and EMI.

The site consistently ranks among the top 1,000 Web pages visited on the Internet and this year became Britain’s second most popular music download site after ITunes, according to market research firm XTN.

Music industry executives say Allofmp3 can sell music so cheaply because it is operating illegally by not paying royalties to recording companies or artists.

Anti-piracy groups and U.S. trade officials have long complained about Russia’s failure to crack down on music, film and software pirates.

According to the International Intellectual Property Alliance, American companies lost nearly $1.8 billion in revenues last year because of piracy in Russia, which ranks second only to China in global piracy studies.

The Russian regulations, which were passed two years ago but did not take effect until Sept. 1, gives works distributed on the Internet the same protections as those published in traditional formats.

Mr. Pozhitkov said the lack of clear rules had prevented prosecutors from building successful cases against Allofmp3. Two criminal cases brought against the company’s directors have languished in the Russian courts.

“There was no understanding that the theft of intellectual property was the same as the theft of any other kind of property,” he said. “Now law-enforcement agencies can finally start doing something.”

Allofmp3 insists that it is legal and says it has nothing to fear from the new law. The site says it is licensed by and pays royalties to the Russian Organization for Multimedia and Digital Systems, which, under a loophole in Russian law, claims it is allowed to hand out distribution rights on behalf of copyright holders without their permission.

“What we’re doing may not be 100 percent up to Western business ethics, but no one has ever proven that we are operating illegally,” said Ilya Levitov, a spokesman for MediaServices, the company that own and runs Allofmp3.com.

Mr. Levitov also said the site can’t be held accountable for actions that may be illegal in other countries.

“We tell all of the people who register with us to check the laws in their own countries,” he said. “It’s their responsibility, not ours.”

But pressure is building to crack down on the site, with U.S. trade negotiators calling it a key issue in Russia’s bid for membership in the World Trade Organization (WTO).

Russia hopes to conclude WTO talks with the United States, the last major country whose approval it needs to join the global trade group, by the end of the year.

“We have made clear to Russia that improved protection for intellectual property is critical to its joining the WTO and we have specifically raised our concerns with Allofmp3.com,” Deputy U.S. Trade Representative Karan Bhatia said in a speech to the National Academy of Recording Arts and Sciences last month.

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