Credit card transactions suspended on illegal music site

By Jeremy M. Simon

Visa and MasterCard have decided to no longer permit credit card transactions for purchasing music made on Russian website AllofMP3.com, which has been accused of selling music illegally.  U.S. officials charge that the website operates outside international agreements and that no artists have been paid royalties.

According to a spokesman, Visa requested that member banks no longer process purchases from AllofMP3.com as of Sept. 1, 2006.  He added that Visa's action was in line with legislation passed in Russia and with basic international copyright and intellectual property norms.

Meanwhile, a MasterCard spokesman said the No. 2 payment system stopped accepting credit card purchases on the website in early August, noting that MasterCard does not tolerate the use of its network for illegal activity.

AllofMP3.com generally charges less than $1 for an entire album and only cents per track, versus the usual cost of about $10 per album and 99 cents a song on Apple's iTunes Music Store and other licensed services.

A Washington-based spokesman for Moscow-based Mediaservices Inc., which owns AllofMP3, confirmed that Visa has suspended payment processing services on the website, but said he was unaware of any other payment vendors who had chosen the same path.  Mediaservices claims it has a licensing agreement with the Russian Organization for Multimedia and Digital Systems, enabling it to legally distribute music from every artist and label.

Published: November 20, 2006

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