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Last 7 Days News : SU MO TU WE TH FR SA All News

Friday, October 06, 2006
Allofmp3.com site refuses to buckle to US pressure

Russian Internet site selling Western pop music at knock-down prices says it will continue its methods even though the United States says it is obstructing Russian accession to the World Trade Organisation.

As the troubled WTO negotiations continue, US negotiators have repeatedly returned to one issue: the worldwide music sales of Russian website allofmp3.com, which defended its conduct in an interview with AFP on Friday.

Russia, the only major world economy not in the WTO, hopes to wrap up membership talks with the United States by the end of this month, the trade ministry has said.

Washington is the last major economy not to have assented to Russian membership of the WTO, which Moscow has been trying to join since the early 1990s. And along with other issues such as access to the financial services market, a particular problem has been Russia's lax protection of intellectual property and the vast quantities of bootlegged music and films found in shops and bazaars across the country. US Trade Representative Susan Schwab has personally taken aim at allofmp3.com.

Her office has placed the company on a "notorious markets" list and in a speech last month she accused Russian authorities of allowing the website to operate with impunity. Washington's objections are mainly because the website has found a ready market outside Russia's borders, becoming the second most popular music site among British consumers after US on-line store iTunes, the Kommersant newspaper said Friday.

"The White House's concern is that the site offers Western music to Western consumers.... This isn't the first time that the administration of George Bush has drawn Russian authorities' attention to the issue," Kommersant said.

The site offers music tracks for as little as a third of a dollar and entire albums for two dollars, which compares with 99 US cents per track from iTunes. Kommersant quoted a defiant representative of the Internet site as saying that complaints by Schwab were actually helping the company.

"Susan Schwab markets us so effectively -- she could already be our press secretary," the unnamed spokesperson said.

The owner of the website, Denis Kvasov, is continuing to battle a lawsuit in a Moscow court by the international music industry body IFPI, Kommersant said. Contacted by AFP, a spokesman for the website's holding company, MediaServices, denied that it was in violation of Russian law and defended its foreign sales.

Washington is using Russia's WTO aspirations as a lever to help US companies, said the spokesman, Ilya Levitov. "They're trying to help their companies in the competition with us because our prices are much lower," Levitov said.

He said that Russian law allowed the company to distribute music that it obtains via a Russian society, the Multimedia and Internet Society. "We're totally in compliance with Russian law.... It's a Russian company owned by Russian people. It's a Russian business," Levitov said.

As for foreign buyers, "we announce on our website to every user that he or she should check the laws of the country in which he lives," Levitov said. In a bid to allay US concerns, Russia's parliament gave preliminary approval last month to a strict new law on intellectual property rights that Deputy Prime Minister Dmitry Medvedev said would bring Russian in line with Western demands.

But more widely the negotiations may have been hampered by Washington's increasingly tough stance towards Moscow on the issue of Iran's nuclear programme. In August the United States announced sanctions against two Russian defence companies over their links with Iran, the defence export agency Rosoboronexport and jetmaker Sukhoi.

Kommersant estimated the annual turn-over of allofmp3.com at between 25 million and 30 million dollars (20 million and 23 million euros).

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