LOS ANGELES – The operator of a Russian Web site that sells music cheaply went on a media offensive Tuesday to deny accusations that it violates copyrights on songs by major artists.
In an online exchange with reporters, representatives from Moscow-based Mediaservices, which owns the AllofMP3.com Web site, asserted it is running a legitimate business.
"The company has been unfairly characterized as a pirate Web site," Vadim Mamotin, the firm's director general, said through a translator. "Nothing could be further from the truth."
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AllofMP3.com typically charges under $1 for an entire album and just cents per track.
By contrast, an album at Apple Computer Inc.'s (AAPL) iTunes Music Store and other licensed services typically costs about $10 and a song 99 cents.
Mediaservices maintains that it pays taxes in Russia and that 15 percent of every sale is sent as royalties to the Russian Multimedia and Internet Society, a licensing body it claims is responsible for compensating copyright owners.
[Search-engine results for the Russian Multimedia and Internet Society led to a Web site that no longer exists.]
The society has "offered to pay the record companies the royalties they collected but [has] been rebuffed," said Mamotin, who asserted the recording industry is trying to gain leverage before entering direct negotiations with Mediaservices or the licensing group.
By paying royalties to the licensing group, Mediaservices claims AllofMP3.com is in compliance with Russian laws.
However, the company has never had a license from major recording companies to sell music in the first place, a requirement under U.S. copyright laws.
The music industry also contends that the Russian licensing group doesn't have the authority to collect and distribute royalties.
"It's a completely spurious claim," said Adrian Strain, a spokesman for the International Federation of the Phonographic Industry. "They haven't respected the rights of the rights holders and have exploited their works without asking permission."
AllofMP3.com does caution computer users outside Russia to make sure they are not violating local laws by downloading music from the site.
The world's largest recording companies — Vivendi's Universal Music Group, EMI Group PLC, Warner Music Group (WMG) and Sony BMG Music Entertainment — have copyright infringement lawsuits pending in Britain against the operators of AllofMP3.com.
Recording companies have also sued Internet service provider Tele2 in Denmark in an effort to force the company to block its subscribers from having access to AllofMP3.
U.S. officials have cited the site as an example of Russia's lax enforcement of intellectual property rights. U.S. Trade Representative Susan Schwab is pressuring Russia to better protect copyrights and patents in negotiations over Russia's bid to join the World Trade Organization.
"We have made it very clear that AllofMP3.com is a clear violation of intellectual property rights and it would be hard to imagine [Russia] getting into the WTO with a site like that up and running," said Sean Spicer, a spokesman for the U.S. Trade Representative.
But Mamotin insisted that his site "is not a barrier to Russia's entry into the WTO."
During the online news conference organized by Washington D.C.-based public relations firm Qorvis Communications, Mediaservices declined to respond to questions about how much money it has made from music sales or how much it has paid out to Russian rights societies.
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