May 27, 2008

By By Antony Bruno, Denver

The RIAA last week dropped its lawsuit against AllofMP3.com, the Russian digital music service that shut down last July. The trade group told Bloomberg that the move was due to the fact that the site is no longer operational and therefore represents a "successful anti-piracy initiative."

The lawsuit was originally filed in December of 2006. AllofMP3 operators insisted that the service obeyed Russian copyright laws, and even offered to pay record companies royalties based on that country's laws. However the Russian government shut down the site after U.S. officials cited it as a barrier to the country joining the World Trade Organization. Last August, owner Denis Kvasov was cleared of any copyright violations by a Russian Court as well.

While AllofMP3 is out of business, the service lives on in a way through MP3Sparks, a service that appeared shortly after the original site was closed. Although there are no formal links to the company behind the AllofMP3 site, former AllofMP3.com members can use their same login and passwords to access the new service.

RIAA executive VP of international affairs Neil Turkewitz says the organization is well aware of MP3Sparks, but trusts the Russian government will take the same steps it did when shutting down AllofMP3, and hence there are no plans for a lawsuit at this time. "Hopefully, the Russian government will do what they need to do," Turkewitz, says.

Russia amended several laws, which went into affect this January, to close the loopholes that allowed AllofMP3 to operate. Most significantly, the country no longer allows "false" collecting societies to grant licenses to digital music service at cut-rate prices.

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