RIAA sues AllofMP3 for $1.65 trillion

The RIAA is seeking $150,000 for each of the 11 million songs AllofMP3 allegedly pirated.

It was first reported by the Washington Post last week that the RIAA was suing the Russian online music distribution company Mediaservices, which owns AllofMP3.com and allTunes.com, for illegally selling copyrighted music.

The companies behind the claim, which include the major record labels Arista Records LLC, Warner Bros. Records Inc., Capitol Records Inc. and UMG Recordings Inc., filed the suit in a New York federal court claiming that “…Mediaservices’ sites sell millions of songs by their artists without paying them ‘a dime’ for the right to do so.”

“Defendant’s entire business … amounts to nothing more than a massive infringement of plaintiffs’ exclusive rights under the Copyright Act and New York law,” according to the lawsuit.

As part of their claim, the labels are seeking $150,000 USD for each of the 11 million songs that were downloaded from June to October 2006 from the AllofMP3.com website.

Now how much money the site has made is unknown but, certainly its profits are not in the trillions of dollars.

“AllofMP3 understands that several U.S. record label companies filed a lawsuit against Media Services in New York,” an unnamed “senior company official” stated. “This suit is unjustified as AllofMP3 does not operate in New York. Certainly the labels are free to file any suit they wish, despite knowing full well that AllofMP3 operates legally in Russia. In the mean time, AllofMP3 plans to continue to operate legally and comply with all Russian laws.”

What he has to say is true, for isn’t AllofMP3 currently complying with Russian copyright laws?

As I previously reported, technically AllOfMP3 does obey the law-Russian law. It pays the standard 15% Russian licensing fee that applies to online music to ROM, the Russian Organization for Multimedia & digital systems. ROM is the Russian equivalent of the RIAA, and according to their website they are “…the national Russian organization providing professional collective management of authors’ property rights and protection of interests of rights holders in cases of use of their works in digital interactive networks, including the Internet.” But, unfortunately for AllOfMP3 the RIAA doesn’t recognize ROM’s legitimacy, perhaps out of fear that it would help legitimize AllOfMP3 and erode their position against it.

Furthermore, considering that they already have online distribution deals with other companies like Microsoft and Apple for instance, it stands to reason that it is not that copyright infringement is the concern but, rather the amount in royalty payments that the Russian sites are required to pay.

After related recent events in which the RIAA was demanding a cut of the profits from every one of Microsoft’s Zune players sold, as well as talk that it would seek a similar arrangement in future deals with Apple’s iTunes, it’s no wonder that the RIAA wants to make sure it gets as much money as it can, consumers and the laws of sovereign countries be dammed.

*UPDATE: From the AllOfMP3 site
An attempt by the major record labels to use a U.S. court to as part of its campaign against AllofMP3.com is imprudent.
AllofMP3 understands that several US record label companies filed a lawsuit against Mediaservices in New York. This suit is unjustified as AllofMP3.com does not operate in New York. Certainly the labels are free to file any suit they wish, despite knowing full well that AllofMP3.com operates legally in Russia.
In the mean time, AllofMP3.com plans to continue to operate legally and comply with all Russian laws.