US record labels Arista Records, Warner Bros, Capitol and UMG recordings have started legal action against Moscow-based Mediaservices. The lawsuit was filed in New York and claims that sites Allofmp3.com and allTunes.com are selling songs without permission. On the other hand, Allofmp3.com insists it is paying royalties to a Russian licensing body called Roms, but the music industry argues that the Russian licensing group has no authority to collect and distribute royalties. 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. Albums on the Russian site are sold for about $1 (60p) in comparison to around $10 (Â£6) at iTunes. Mediaservices is already having trouble with legal action in Britain while credit companies (Visa & MasterCard) have denied transactions to these sites.
News source: BBC News