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Visa Cuts Off AllOfMp3.com

Posted by CmdrTaco on Thu Oct 19, 2006 09:17 AM
from the ends-with-a-whimper dept.
denebian devil writes "On the heals of allofmp3.com's press conference trying to clean up its image, Visa has suspended its credit card service to allofmp3.com. From the article "[Allofmp3 is] no longer permitted to accept Visa cards," said Simon Barker, a Visa International spokesman. "The action we've taken is in line with legislation passed in Russia and international copyright law." Almost simultaneously, allofmp3.com has announced that it is shifting over to an ad-supported model. For those who don't want to (or can't) buy allofmp3's DRM-free music, they are providing DRM-laden music that can be played only within a restricted player provided by the website."

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[+] Your Rights Online: Russia Agrees To Shut Down AllOfMP3.com 550 comments
Pro-SEO writes, "An official document (PDF), dated November 19, summarizes an agreement between the U.S. and Russia in which Russia has agreed to close down AllofMP3.com, and any sites that 'permit illegal distribution of music and other copyright works.' The agreement is posted to the Web site for the Office of the U.S. Trade Representative. It summarizes the joint efforts of the two countries to fight content piracy, an issue in which Russia and Eastern Europe figure prominently." From the document: "This agreement sets the stage for further progress on IPR issues in Russia through the next phase of multilateral negotiations, during which the United States and other WTO members will examine Russia's IPR regime."
[+] Your Rights Online: RIAA Goes for the Max Against AllofMP3 777 comments
Spad writes "Zeropaid is reporting that as part of its ongoing lawsuit, the RIAA will be seeking the maximum of $150,000 per song for each of the 11 million MP3s downloaded from the Russian AllofMP3.com between June and October last year. This amounts to roughly $1.65 trillion, probably a tad more than AllofMP3 has made in its lifetime. A representative of AllofMP3 stated: 'AllofMP3 understands that several U.S. record label companies filed a lawsuit against Media Services in New York. This suit is unjustified as AllofMP3 does not operate in New York. Certainly the labels are free to file any suit they wish, despite knowing full well that AllofMP3 operates legally in Russia. In the mean time, AllofMP3 plans to continue to operate legally and comply with all Russian laws.'"
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  • by MoOsEb0y (2177) on Thursday October 19 2006, @09:19AM (#16501023)
    ...there's Mastercard.
    • Re:For everything you want to buy... (Score:5, Informative)

      by igny (716218) on Thursday October 19 2006, @09:20AM (#16501047) Homepage
      Mastercard cut off AllofMP3 as well.
      [ Parent ]
      • Re:For everything you want to buy... (Score:5, Informative)

        by NetDanzr (619387) on Thursday October 19 2006, @09:29AM (#16501185)
        That's where paying through third parties comes in. I've been using XROST for over a year when recharging my Allofmp3 account, and that method has been always working well. Similar system has been working with sports betting sites for a while, and given how easy it is to reroute money I don't think non-US based businesses will have to shut down anytime soon.
        [ Parent ]
        • XROST? (Score:3, Interesting)

          Can you elaborate?

          I saw the XROST option on there a while ago, but I don't know anything about it or how it works.

          Also, I recall at one point there was an option to use some type of "online currency" that was sold in the U.K. at gas stations and retail sto
          • Re:XROST? (Score:5, Informative)

            by NetDanzr (619387) on Thursday October 19 2006, @10:08AM (#16501737)
            XROST is simply an on-line gift card shop. You purchase a gift card, and get a card number and pin code in return. You input this information into Allofmp3, and your account is recharged.

            Not so long ago, XROST still worked with PayPal. Currently, it works primarily with prepaid cash cards - the type you mention - but also with Click&Buy, which is available in the US. I've got family in Europe, so for me it's easiest to Skype them and ask for one of the cash cards.

            [ Parent ]
            • Re: (Score:3, Interesting)

              It seemed to me XROST was simply a front for allofmp3.com so that they could take credit cards. Have you seen any other merchant that actually takes XROST? I remember that every other retailer listed on their site was "coming soon."
      • Re:For everything you want to buy... (Score:5, Informative)

        by chill (34294) <Charles.E.Hill@gmail.com> on Thursday October 19 2006, @09:39AM (#16501323) Homepage Journal
        Mastercard cut off AllofMP3 as well.

        No, they didn't. Mastercard is the only credit/debit option that works, as of 5 minutes ago.
        [ Parent ]
    • Re:For everything you want to buy... (Score:5, Informative)

      by Balthisar (649688) on Thursday October 19 2006, @10:22AM (#16501999) Homepage
      Just tried my Mastercard, and then I stopped. It looks like payments are now being outsourced to some place called www.e-centru.com, which is in Moldova. I don't remember ever being redirected to another payment site in the past, although it's showing that I last recharged my account on March 17th, 2005 (I don't buy a lot of music [or pirate it for that matter]). Anyone else ever been directed to this company to accept payments? It *is* showing just Mastercard as an option.

      Well... here goes. That's what fraud protection is good for.

      Well, it worked. Now I've got to figure out $25.25 worth of music that I want. I wish they had audiobooks.
      [ Parent ]
      • Re: (Score:3, Informative)

        I made a payment yesterday and bought some songs using those credits. I can understand that some are vary about paying on russian or non-us operated websites. But let me point out that it would be very foolish for allofmp3.com engage in any fraudulent ac
        • Re: (Score:3, Insightful)

          Tell me, why do you go through all this hassle, when you could just steal the music in one step, without paying a middle-man?

          Do you actually believe that some of this money gets back to the bands/producers?
  • AllOfMp3.com's Legality (or lack of) (Score:5, Informative)

    by eldavojohn (898314) * <my/.username@@@gmail.com> on Thursday October 19 2006, @09:19AM (#16501025) Homepage Journal
    This whole time AllOfMp3 has been operating, it has been under a clause in the Russian government's legislation (from their site):
    The availability over the Internet of the ALLOFMP3.com materials is authorized by the license # LS-3?-05-03 of the Russian Multimedia and Internet Society (ROMS) and license # 006/3M-05 of the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR). In accordance to the licenses' terms MediaServices pays license fees for all materials downloaded from the site subject to the Law of the Russian Federation "On Copyright and Related Rights". All these materials are solely for personal use. Any further distribution, resale or broadcasting are prohibited.

    The works available from ALLOFMP3.com are protected by the Law of the Russian Federation "On Copyright and Related Rights" and are for personal use of a buyer. Commercial use of such material is prohibited. Recording, copying, distribution on any media is possible only upon special consent of a Rightholder.

    The user bears sole responsibility for any use and distribution of all materials received from AllOFMP3.com. This responsibility is dependent on the national legislation in each user's country of residence. The Administration of AllOFMP3.com does not possess information on the laws of each particular country and is not responsible for the actions of foreign users.
    Read that last paragraph, if you've been in the United States & using AllOfMp3.com, they've been shifting legality issues to you. Visa has now chosen to recognize this issue and not be party to breaking the law.

    So, to recap, it seems that media in Russia is still somewhat regarded as belonging to the people. However, this is not true in many other countries.

    I cannot say I blame them with the gustapo **AA about.
    • Re: (Score:3, Interesting)

      What's amazing is that Visa ever allowed it in the first place.
      • Re: (Score:3, Insightful)

        What's amazing is that Visa ever allowed it in the first place.
        How's that amazing? Visa makes money off of every transaction. I'd say that they only quit because someone put pressure on them, not because they want to stop making money on those transacti
        • by minus9 (106327) on Thursday October 19 2006, @09:43AM (#16501369) Homepage
          "(sodomy anyone?)."

          Not for me thanks.
          [ Parent ]
        • Re: (Score:3, Insightful)

          I'd say that they only quit because someone put pressure on them, not because they want to stop making money on those transactions.

          Possibly because Visa in the US is being floated on the stock exchange. I guess that is because the USA is moving in a rather
        • by swillden (191260) * <shawn-sd@willden.org> on Thursday October 19 2006, @10:31AM (#16502157) Homepage Journal

          Visa makes money off of every transaction.

          "Visa" doesn't make money on transactions. The various organizations who own the Visa brand are banking consortia. Their job is to manage the brand name, define payment standards, validate implementations of those standards, and generally do whatever makes sense to facilitate their membership's ability to make money. The Visa organizations are primarily funded by dues paid by the member banks.

          When you make a Visa payment, the money passes through two or three sets of hands. It goes like this:

          1. The merchant submits the transaction to a bank the merchant has a relationship with. This bank is called the "merchant acquirer". Some of the big merchant acquirers don't do any retail or wholesale banking, but are just transaction processors. Nevertheless, they're banks. They have to be.
          2. The merchant acquirer submits the transaction either to a clearinghouse (which, with one notable exception, is not really related to any official Visa organization) or directly to the bank that issued your credit card (called the "issuer").
          3. The issuer validates the transaction and sends a notification back to the merchant acquirer (possibly via the clearinghouse).
          4. The merchant acquirer (eventually) puts money into the merchant's bank account.
          5. The issuer sends you a bill.

          The merchant acquirer and issuer both make money on the transaction, and the clearinghouse, if any, takes another small slice. The issuer obviously also makes money on finance charges if you don't pay your balance off right away.

          All of this just highlights the fact that none of these players have any interest at all in shutting off the flow of money to allofmp3. The acquirer that allofmp3 uses is a Russian bank, so they have no legal issues, and plenty of interest in taking a slice of allofmp3's business. The various issuing banks are individually anonymous in the situation, they figure their only responsibility is to make sure that the transactions are not fraudulent -- mainly because they don't want to end up potentially footing the bill for the fraud. The clearinghouses just want to push transactions from point A to point B.

          Each player can point to the others and say that it ought to be their decision as to whether or not payments from a certain merchant should be accepted. The most logical decisionmaker as to the legitimacy of the merchant is the acquirer -- and that's the Russian bank for whom there's no legal issue!

          I find it quite surprising that Visa International decided to step in and order their members (the organizations who pay them!) not to accept allofmp3.com payments.

          [ Parent ]
          • by yppiz (574466) <zippy@cs.brand e i s.edu> on Thursday October 19 2006, @11:08AM (#16502833) Homepage
            Correct me if I'm wrong, but I believe Visa (the corporate entity) also runs VisaNet, the network over which Visa transactions are sent, and charges a small fee per transaction.

            Also, here is an excerpt from the Wikipedia entry for Visa [wikipedia.org] decribing Visa's complex corporate structure.

            *

            Legally, Visa comprises four non-stock, separately incorporated companies that employ 6000 people worldwide: Visa International Service Association ("VISA"), the worldwide parent entity; Visa U.S.A. Inc.; Visa Canada Association; and Visa Europe Ltd. The latter three separately incorporated regions have the status of group members of Visa International Service Association, whereas the unincorporated regions (Visa Latin America [LAC], Visa Asia Pacific and Visa Central and Eastern Europe, Middle East and Africa [CEMEA]) are divisions within VISA.

            --Pat
            [ Parent ]
      • Re: (Score:3, Insightful)

        What's amazing is that Visa ever allowed it in the first place.

        (picking myself up off the floor)
        Its amazing that a soulless multinational mega corporation took money ?
        They only fall in line when the lawyers deem the risk larger than the reward.
    • Re: (Score:3, Interesting)

      >Read that last paragraph, if you've been in the United States & using AllOfMp3.com, they've
      >been shifting legality issues to you.

      What responsability? There is no responsability for a purchaser of music that is applicable. A buyer is for example
        • by Pofy (471469) on Thursday October 19 2006, @10:26AM (#16502069)
          >Once you bring your purchase into the US, US law applies.

          Yes, but please tell what specific law you have in mind, there really is none.

          >The fact that you bought the item in Russia doesn't necessarily
          >mean that Russian law applies.

          The purchase is done under Russian law if done in Russia. That is allofmp3's responsability. If a person then wants to use what they buy there to break the law in another country is that persons responsability. In the case in question, there is no such law violation though since it is perfectly legal to brgin a copy of a song or music into USA from other countries.

          >I'm not a lawyer, but I believe that the AllOfMp3 site violates
          >the spirit, if not the letter, of international copyright law.

          What spirit? Are you claiming that there is a spirit that says any product with a work protected by copyright can not be moved from one country to another? I suppose someone should tell that to all the stores on international airports selling music CDs. For the record, no, there is no such restriction or anything at all about such restrictions in copyright laws, treaties or that like.

          >That being the case, you're correct that the user isn't breaking the law. It's just a
          >convenient way for AllOfMp3 to shift the blame:

          So allofmp3 is not breaking the law and the buyer is not breaking the law, who is and what law?

          >We can't be responsible if US or EU users are downloading content that they shouldn't.

          What do you mean "shouldn't"? Either there is some law making it illegal or there is not. It happens to exist no such law.
          [ Parent ]
      • by Pofy (471469) on Thursday October 19 2006, @09:58AM (#16501579)
        >So if you live in Russia and have a VISA card can you still not use your VISA card at
        >allofmp3 even though it is legal for you to use that site?

        What does were you live have to do with it? What law makes it illegal for you to buy the music from Russia if you live in another country? Or are you claiming that USE, Turkey, Japan, South Africa (or whatever other non Russian country you might prefer) have some law forbiding you to purchase from another country? And what would that have to do with copyright who for sure doesn't have such limitations (we are talking of purchase of single number of copies of each song and for personal use, just like if you have bought the CD while in Russia and bring it home with it, just mentioning it so that you don't have to claim anything about import and I have to reply to tell about what is covered by the import part in copyright law and what is not).

        [ Parent ]
        • by Pofy (471469) on Thursday October 19 2006, @10:14AM (#16501857)
          >2) Import laws (goes something like "copies that couldn't
          >legally have been made in the US, can't be imported to the
          >US". Since the Russian law doesn't apply in the US, you
          >can't import copies made under that law.

          Why do people who don't know the law, insists on making up their own version of it? Here is a link to the relevant law you probably think you are telling about:

          http://www.law.cornell.edu/uscode/html/uscode17/us c_sec_17_00000602----000-.html [cornell.edu]

          Note the exceptions (2), which would be applicable to anyone buying music over the net in single quantities of each work. Thus, it doesn't count as importation and the restrictions you refer to are not applicable and irrellevant.
          [ Parent ]
  • Thanks Visa! (Score:5, Insightful)

    by Rosco P. Coltrane (209368) on Thursday October 19 2006, @09:19AM (#16501035)
    For those who don't want to (or can't) buy allofmp3's DRM-free music, they are providing DRM-laden music that can be played only within a restricted player provided by the website." ... that anybody can promply record/reencode DRM-free.
  • Beatport (Score:5, Insightful)

    by GroovBird (209391) * on Thursday October 19 2006, @09:21AM (#16501077) Homepage Journal
    Not to worry.

    I never had any issues with paying for my music. I had issues with the DRM that was applied to that music. AllofMP3 offered that same music without DRM. If they turn out to be illegal (because the group they pay royalties to turns out not to have to license the music to AllOfMP3) then so be it.

    I found an alternative, that better suits my taste of music and is completely legit, but a lot more expensive.

    http://www.beatport.com/ [beatport.com]

    Dave
    • Re: (Score:3, Insightful)

      If you're into electronic music, you really can't do better than Beatport.com:

      1) No DRM.
      2) Legal (with no grey areas like AllOfMp3.com).
      3) Multiple high quality encoding options (192 AAC being my choice).
      4) Long, high quality previews.
      5) A genius Flash int
  • "Heals" ~ "heels"? (Score:5, Funny)

    by OakDragon (885217) on Thursday October 19 2006, @09:23AM (#16501093) Journal
    "On the heals of allofmp3.com's press conference..."

    * groan *

    My inner grammar Nazi is involuntarily goose-stepping after reading that.

  • pain (Score:3, Funny)

    by Ryan Monster (767204) on Thursday October 19 2006, @09:23AM (#16501095)
    My heels hurt from reading that summary. I hope they heal soon.
  • Aaaayyyyyy. (Score:4, Funny)

    by Rob T Firefly (844560) on Thursday October 19 2006, @09:31AM (#16501209) Homepage Journal
    For those who don't want to (or can't) buy allofmp3's DRM-free music, they are providing DRM-laden music that can be played only within a restricted player provided by the website."
    What's Russian for "jump the shark?"
  • Back to piracy then... (Score:5, Insightful)

    by bteeter (25807) <brian@briante[ ]r.com ['ete' in gap]> on Thursday October 19 2006, @09:31AM (#16501213) Homepage
    No one wants DRM music. That was a primary reason everyone used AllofMP3.com. That and the price of course. Now instead of AllofMP3 customers paying a small fee for music, I bet a lof of them will hit Shareaza and the file share networks again.

    Great move RIAA...

    Take care,

    Brian
  • alternative (Score:5, Insightful)

    by dhuff (42785) on Thursday October 19 2006, @09:34AM (#16501255)
    Looks like you can point your browser back to Mother Russia at Alltunes.com [alltunes.com] and be back in business pretty quick (incl. payment with Visa).
  • No problem for me (Score:5, Funny)

    by edmicman (830206) on Thursday October 19 2006, @09:49AM (#16501451) Homepage Journal
    I'll just stick to sending them envelopes of cash like I've always done!
  • No way to pay online now? (Score:4, Funny)

    by krell (896769) on Thursday October 19 2006, @09:51AM (#16501493) Journal
    Now I'm going to have to all the way to Russia with cash and bring back a suitecase full of MP3s. As long as I can get past the MP3-sniffing dogs at La Guardia, I should be OK.
  • by Uninvited Guest (237316) on Thursday October 19 2006, @09:53AM (#16501513)
    FWIW, remember that allofmp3.com claims to be "broadcasting" music on demand over the Internet, under the broadcast laws in Russia. Allofmp3.com pays its royalties based on those broadcast rules. This is similar to how ASCAP, BMI, and SESAC work with broadcast radio stations in this country; the royalties are sent to an agency which distributes the proceeds directly to the artists. The RIAA and others are claiming that allofmp3.com is duplicating and distributing recordings without paying for the rights to do so. Depending on how Russian law on broadcast rights is worded, allofmp3.com may be perfectly legitimate.
  • My $0.02 (Score:5, Insightful)

    by MyLoveIsAJoke (964503) on Thursday October 19 2006, @10:02AM (#16501631)
    allofmp3.com = Beautiful business model. If it is truly not legitimate, this should be a cue for a ligit company to start up stateside using a similar model. RIAA = Epitome of how an organization should not be run for 3 reasons. #1 is they screw over thier cash cows (the "artists"). #2 it screws over its buyers (us). #3 Thier suckyness is impacting the health of thier business, and will eventually, although it'll take a while and require alot of kicking and screaming, they will fail. Had they created a site like allofmp3.com in 1996 when I began using electronic copies of music...they could have saved themselves. iTunes sucks. Plain and simple. iTunes doesn't carry much of anything I listen to, its DRM is a pain in the balls, and $0.99 is too much to pay for a track with the fraction of the overhead of a record (conventional)store. That is all I have to say.
  • by Hap76 (995519) on Thursday October 19 2006, @12:25PM (#16504027)
    Isn't their tagline "it's everywhere you want to be"...except what they think might be illegal, or wrong, or immoral....

    If you want to make brand money as a cash replacement (which I assume is what their money cards are attempting to do), then you have to be a open carrier (allowing the end users to deal with the legal responsibility of their use of money). Once Visa picks and chooses what uses of their currency to allow, I have no way to know what the value of their currency is (because I don't know what I can do with it), and there's less point to using it over using cash (potential safety is helpful, but like a gift card, limitation in usage is a significant loss in value).

    By announcing this loudly, they're telling their cash card holders that what they're holding isn't really cash, though Visa wishes to sell it as such. Maybe Visa's users will get the message.
  • Hypocrisy (Score:4, Insightful)

    by MrSteveSD (801820) on Thursday October 19 2006, @02:27PM (#16506329)
    I think you have to be consistent with the application of this mindset. If it's not ok for consumers to shop around for countries with the most convenient laws, then it should not be ok for companies to do the same thing. That means no more situating factories in countries where working hours and conditions would breach your own laws.
          • Re: (Score:3, Informative)

            I'd rather buy my CD's used online for about $4 shipped. I can wait till they drop to that price and by then I'm sure I'm not contributing to the RIAA's pockets.
            • Re: (Score:3, Insightful)

              Absolutely, used media - CD, DVD - is the best way to go. You get the same thing ; re-use the original materials instead of creating waste ; and trade with other individuals (transferring ownership of goods) without going back and paying the marketers (RIA
          • Re: (Score:3, Insightful)

            eMusic doesn't have the music that people want. Of course, what people wants depends on the marketing and airplay, but still. Saying that eMusic can replace the iTunes Store is like saying an Intellivision can replace a Wii.

            I'd rather go get free music on
    • Re: (Score:3, Informative)

      As anyone who's used PayPal can probably attest to, they're extremely aggressive about closing accounts down over the slightest thing.

      I doubt AllOfMp3's accounts there lasted ten minutes.

      I think XROST is their way of getting around the financing problems o
        • Re:great timing ;( (Score:5, Insightful)

          by TheGratefulNet (143330) on Thursday October 19 2006, @11:09AM (#16502847)
          mod me a troll?

          this isnt' a troll post people, get a clue.

          it IS true that the mpaa is not the same as law enforcement. and visa is also not law enforcement.

          if I wanted to buy playboy mags, will visa 'use their morals' and stop me? no? oh really!

          how is this any different. they claim some law is being broken but they can't ennunciate what, exactly that is.

          again, I say - if a law is being broken, call the cops. visa is NOT my police force and I object to them even thinking they are allowed to wear that hat.

          you KNOW that pressure is put on visa from the record industry. in that light, I see the mpaa/riaa as no worse or better than the 'russian mob'. you can't claim you are following what's good and right and yet be pressured by NON LAW ENFORCEMENT LOBBY GROUPS.

          either you are a money brokering business OR you are in the morality and law enforcement business. you cannot be in both. and shouldn't be.

          (just because you (mods) may disagree with me - that does NOT make this a troll post. sheesh!)
          [ Parent ]
              • Re:great timing ;( (Score:5, Insightful)

                by Catbeller (118204) on Thursday October 19 2006, @10:45AM (#16502423) Homepage
                "As far as I know, allofmp3 does not have license to distribute its songs in the US. Therefore, selling songs in the US is an act of copyright infringement in the US."

                They aren't in the U.S. There are no treaties involved, no trade agreements either. U.S. law does not apply outside of the U.S., with the exception of us kidnapping people around the world and torturing them to death, which apparently is legal whether anyone else in the world objects or not.

                And, to clarify the issue, think of it as people *phoning* a Russian server and listening to recorded music on the phone for a fee. Imagine them recording the sound with an old-fashioned tape recorder. This would break no law in the U.S. or Russia. It's not even a metaphor, it's what we're doing.
                [ Parent ]
    • by Rashkae (59673) on Thursday October 19 2006, @01:34PM (#16505255) Homepage
      What exactly would they sue allofmp3 Customers for??? The most they can do is demand that all files purchased from allofmp3.com be deleted. Unless they also have some kind of proof that the buyer has been copying the files to other people, there is no grounds for civil damage.
      [ Parent ]