The RIAA dropped its $1.65 trillion lawsuit against Russian music-download site AllOfMP3.com, declaring victory and calling the site “defunct and out of business” thanks to the RIAA’s anti-piracy lobbying.
The lawsuit, originally filed in 2006, sought the maximum $150,000 penalty for the site’s alleged 11 million unauthorized downloads, totaling $1.65 trillion -- an amount that exceeded the Russia’s 2005 GDP. At the time, AllOfMP3 parent company MediaServices claimed it operated under a bulk license granted to it by Russian Organization for Multimedia and Digital Systems, allowing it to operate legally under Russian law. It is widely considered that these claims were affirmed when Russian courts acquitted the site’s former owner, Denis Kvasov, of criminal copyright infringement charges in August 2007.
Nevertheless, the Russian government shut down AllOfMP3 last July after United States government diplomats threatened to block the Russia’s entry into the World Trade Organization if AllOfMP3 went unaddressed. The site’s storefront operations moved to MP3Sparks.com last July – MP3Sparks is owned by the same company – and AllOfMP3 changed into a low-traffic blog detailing its odyssey with music executives and a handful of news stories.
RIAA representatives provided no comment when asked for specifics on why they dropped the lawsuit.
Lawyers for MediaServices said that the RIAA “never correctly commenced the proceeding in the first place,” referring to the fact that the RIAA filed its lawsuit in a New York U.S. District Court, even though MediaServices had no business offices in the United States. “This suit is unjustified as AllofMP3.com does not operate in New York,” said the company’s December 2006 response. “Certainly the labels are free to file any suit they wish, despite knowing full well that AllofMP3.com operates legally in Russia.”
Despite the RIAA’s self-proclaimed victory against MediaServices, MP3Sparks remains in business. Critics have been quick to note this fact, wondering why the RIAA would make such a huge mistake. But a closer look at MP3Sparks reveals that its primary lifeline, credit and debit card processing, is cut. Customers wishing to refill their MP3Sparks account can only do so through esoteric third-party payment schemes, and a Wikipedia article on AllOfMP3 notes that there are currently “no functional methods by which users can make payments for MP3Sparks downloads.”
Still, MediaServices attorneys remain optimistic, noting that the RIAA had a “rare triumph of good sense” in its decision to abandon the complaint against AllOfMP3.com. MediaServices now has bigger problems. With AllOfMP3 a shadow of its former self, and MP3Sparks essentially bleeding to death, competing Russian-legal download sites like MP3Fiesta.com have since moved in for the kill – and for now, they take credit cards.