Denis Kvasov, the former owner of the now-shuttered shady digital music site AllOfMP3.com, may face three years in jail and a 15 million ruble fine, as Russian authorities are pursuing a copyright-infringement lawsuit against him. But Crunchgear has a pretty intriguing analysis of why Kvasov shouldn’t be prosecuted, and why the site, technically, wasn’t doing anything illegal until the U.S. government muscled its way in (although the ethics are, of course, another matter entirely):
Without getting into the finer details of how Russian copyright law is structured, the basic premise is that collecting societies, as they’re known, are allowed to license music to companies without first securing permission from the music’s copyright holder.
A body known as the Russian Organization for Multimedia and Digital Systems (ROMS) is one such collecting society. ROMS licensed music to Allofmp3.com, who in turn gave ROMS a 15% cut of its revenue. Most of that revenue is paid by ROMS to the copyright holders if, and only if, they ask to be paid. By asking to be paid, copyright holders must sign an agreement with ROMS basically acknowledging it as a legitimate collecting society.
So Allofmp3.com’s stance has been that it’s offered to pay the record companies but the record companies never accepted the offer.
Another thing to consider is that in Russia, a CD costs about $3. So Allofmp3.com’s prices, to Russians, were similar to what we Americans pay on iTunes. It just so happened that Allofmp3.com was able to enjoy a little collateral cash (millions, actually) from Americans who didn’t feel like paying full price for music. It’s not that Allofmp3.com started for the sole purpose of selling deeply discounted music to Americans — its main user base was its own citizens — it just happened to turn a blind eye to everyone else from around the world using its service.
Until the U.S. government came in and started throwing around its WTO-admitting power, that is. The one thing that really bugs us about the ROMS setup is the “we’ll hold your money until you give us a call” attitude toward copyright holders–surely Warner Music Group is in the book? Then again, SoundExchange pretty much has the same “we won’t call you” setup, but since that’s only the case with “the little guy,” it’s apparently OK to our powers that be. What a country!
Former AllOfMP3.com Owner Faces Jail Time [CrunchGear]