It's been quite some time since we heard about Allofmp3, the Russian online music download store that offered extremely low prices on DRM-free downloads (you even got to pick your format). The company insisted that it was legal in Russia, and had all the appropriate licenses. Multiple times, the company was brought to court in Russia, and every time, it was found to be legitimate. In fact, the company even tried to pay royalties for the music it sold, but the recording industry refused to accept the payments.

However, the entertainment industry had US diplomats lean on Russia, claiming that if it didn't shut down the site, the US would block Russia's admittance into the WTO. So, eventually, Russia did shut down the site through somewhat questionable means. Of course, within minutes of it being shutdown, the company reappeared under the name Mp3Sparks. In fact, Allofmp3.com accounts worked just fine on Mp3Sparks. And, of course, there are a dozen or so other Russian online download stores that also offer the same sort of deal (and all of which are playing by Russian copyright laws).

For some reason, though, Mp3Sparks just hasn't received nearly as much attention as Allofmp3, and it seems like The Pirate Bay has taken on the role of "public enemy number 1" for the recording industry. So, it should come as little surprise that the RIAA has dropped its lawsuit against Allofmp3.com, saying that the company is now defunct, while totally ignoring Mp3Sparks.

We recently wrote about how the US gov't has been saying repeatedly that it won't let Russia into the WTO if Allofmp3 comes back to life. This does seem rather ridiculous for a variety of reasons. After all, within Russia, the company has been found to be legal. And, secondly, it's not as if the US is in the WTO's good graces after ignoring the WTO's ruling on online gambling. If the WTO really wanted to punish the US for ignoring that issue, why not ignore the US's pleas to keep Russia out of the WTO itself? In the meantime, there's a bizarre statement in an article discussing Rep. Howard Berman once again saying that Russia needs to stop Allofmp3.com if it wants into the WTO. The article discusses how Russia has been slowly changing its laws following all this pressure from the US, and under the new laws, Allofmp3 may now be considered illegal. Yet, rather than focus on how it was the change of laws that made a previously legal service suddenly illegal, the article notes that "those legal changes could confirm what record companies have believed all along--that the Russian music stores are illegal." That seems rather bizarre, doesn't it? If the law gets changed, that doesn't confirm what's been said all along at all. It actually confirms the opposite. That the services were perfectly legal until a bunch of protectionist politicians who represent districts where the entertainment industry is based, bullied a foreign country into changing its laws to protect outdated business models.

With Allofmp3.com announcing that it plans to reopen the site now that (once again) the site has been found to be legal under Russian laws, it didn't take long for the RIAA... er... U.S. government to make its unhappiness clear. A spokesman for the U.S. Trade Representative has announced that if Allofmp3.com reopens, then Russia has kissed away its chance to join the WTO. This isn't all that surprising, given that the U.S. (at the urging of the RIAA) threatened Russia that it would keep the nation out of the WTO unless it shut down Allofmp3.com. Of course, it doesn't make much sense either. This is a private dispute between private entities. It doesn't seem reasonable for the US gov't to be getting involved. Secondly, as should now be quite clear, Allofmp3.com is operating legally under Russian laws. So it hasn't done anything wrong either. Just because some companies in the US don't like the fact that Allofmp3 has come up with a business model that customers actually like, it doesn't mean that the US gov't should ban Russia from the WTO. And, of course, this doesn't even begin to get into how ridiculous it is that the business model of a single small company should be the key factor in whether or not an entire country is allowed into the WTO. In the meantime, given how often the US has been ignoring the WTO over the Antigua online gambling case, perhaps the WTO should simply ignore the US on this one.

Back in 2005, following a criminal investigation of the site Allofmp3.com in Russia, officials declined to press charges, noting that the site did appear to be operating legally under existing Russian laws. That, of course, set off a string of events, including having the US pressure Russia to change its laws or risk being kept out of the WTO. Eventually, Russia did change some laws and forced Allofmp3.com to shut down, though it quickly popped up again under another name. It didn't take long for the big record labels to then push for the criminal prosecution of the site's owner, when all he had really done was help demonstrate a business model for selling music that seemed to be working well (i.e., price it reasonably and don't restrict it with DRM). Also, he tried to pay royalties to the RIAA, but they wouldn't accept them. Luckily for Allofmp3, it didn't take long for a court to see through the recording industry's arguments and throw out the case, pointing out (once again), that the site didn't break any Russian laws, while also noting that the record labels did an awful job presenting any real evidence of copyright infringement on the part of Allofmp3.

The saga of Allofmp3 is quite well known at this point. The company that was apparently following the laws of Russia for licensing music made a name for itself selling DRM-free music at very reasonable points. Rather than recognizing that this was proof of a very viable business model for the recording industry, the recording industry turned to US gov't officials to pressure Russia into shutting down the site by threatening to block Russia's entrance into the WTO. Eventually, Russia caved. And, while the site was eventually shut down, an almost identical site quickly popped up in its place. That, of course, can't be good for Russian politicians looking to get into the WTO, so now they're threatening jailtime for Allofmp3's owner. If you step back and look at the big picture, a struggling U.S. industry has had its gov't pressure a foreign gov't to throw a foreign entrepreneur in jail for demonstrating a better business model to them. This is the world we live in.

Earlier in the month, Russian authorities shut down the well-known Allofmp3.com site, following complaints from the US government -- and the implication that if they didn't do so, the US would make it hard for Russia to join the World Trade Organization. Of course, the people behind Allofmp3 quickly set up shop at another URL, and went about their business selling dirt-cheap digital music. It's today been reported that Alltunes, another site owned by Allofmp3's parent company, has won a court case against Visa's Russian agent, after Visa refused to process its payments. As the company points out, it's never been convicted of illegal activity, and Visa cut it off after complaints from the IFPI, the international equivalent of the RIAA. It's not clear to what extent Visa and its agents can be forced to =offer their services to a business, however the Allofmp3 folks are correct when they assert that it's not Visa's -- nor the IFPI's -- right to decide when copyright's been violated, particularly when they don't hold any of the copyrights in question.