Visa Cuts Off AllOfMp3.com

denebian devil writes "On the heals of allofmp3.com's press conference trying to clean up its image, Visa has suspended its credit card service to allofmp3.com. From the article "[Allofmp3 is] no longer permitted to accept Visa cards," said Simon Barker, a Visa International spokesman. "The action we've taken is in line with legislation passed in Russia and international copyright law." Almost simultaneously, allofmp3.com has announced that it is shifting over to an ad-supported model. For those who don't want to (or can't) buy allofmp3's DRM-free music, they are providing DRM-laden music that can be played only within a restricted player provided by the website."

Comments

AllOfMp3.com's Legality (or lack of)

[eldavojohn]

This whole time AllOfMp3 has been operating, it has been under a clause in the Russian government's legislation (from their site):

The availability over the Internet of the ALLOFMP3.com materials is authorized by the license # LS-3?-05-03 of the Russian Multimedia and Internet Society (ROMS) and license # 006/3M-05 of the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR). In accordance to the licenses' terms MediaServices pays license fees for all materials downloaded from the site subject to the Law of the Russian Federation "On Copyright and Related Rights". All these materials are solely for personal use. Any further distribution, resale or broadcasting are prohibited.

The works available from ALLOFMP3.com are protected by the Law of the Russian Federation "On Copyright and Related Rights" and are for personal use of a buyer. Commercial use of such material is prohibited. Recording, copying, distribution on any media is possible only upon special consent of a Rightholder.

The user bears sole responsibility for any use and distribution of all materials received from AllOFMP3.com. This responsibility is dependent on the national legislation in each user's country of residence. The Administration of AllOFMP3.com does not possess information on the laws of each particular country and is not responsible for the actions of foreign users.

Read that last paragraph, if you've been in the United States & using AllOfMp3.com, they've been shifting legality issues to you. Visa has now chosen to recognize this issue and not be party to breaking the law.

So, to recap, it seems that media in Russia is still somewhat regarded as belonging to the people. However, this is not true in many other countries.

I cannot say I blame them with the gustapo **AA about.

Re:AllOfMp3.com's Legality (or lack of)

[Pofy]

>2) Import laws (goes something like "copies that couldn't
>legally have been made in the US, can't be imported to the
>US". Since the Russian law doesn't apply in the US, you
>can't import copies made under that law.

Why do people who don't know the law, insists on making up their own version of it? Here is a link to the relevant law you probably think you are telling about:

http://www.law.cornell.edu/uscode/html/uscode17/us c_sec_17_00000602----000-.html

Note the exceptions (2), which would be applicable to anyone buying music over the net in single quantities of each work. Thus, it doesn't count as importation and the restrictions you refer to are not applicable and irrellevant.

Re:AllOfMp3.com's Legality (or lack of)

[swillden]

Visa makes money off of every transaction.

"Visa" doesn't make money on transactions. The various organizations who own the Visa brand are banking consortia. Their job is to manage the brand name, define payment standards, validate implementations of those standards, and generally do whatever makes sense to facilitate their membership's ability to make money. The Visa organizations are primarily funded by dues paid by the member banks.

When you make a Visa payment, the money passes through two or three sets of hands. It goes like this:

1. The merchant submits the transaction to a bank the merchant has a relationship with. This bank is called the "merchant acquirer". Some of the big merchant acquirers don't do any retail or wholesale banking, but are just transaction processors. Nevertheless, they're banks. They have to be.
2. The merchant acquirer submits the transaction either to a clearinghouse (which, with one notable exception, is not really related to any official Visa organization) or directly to the bank that issued your credit card (called the "issuer").
3. The issuer validates the transaction and sends a notification back to the merchant acquirer (possibly via the clearinghouse).
4. The merchant acquirer (eventually) puts money into the merchant's bank account.
5. The issuer sends you a bill.

The merchant acquirer and issuer both make money on the transaction, and the clearinghouse, if any, takes another small slice. The issuer obviously also makes money on finance charges if you don't pay your balance off right away.

All of this just highlights the fact that none of these players have any interest at all in shutting off the flow of money to allofmp3. The acquirer that allofmp3 uses is a Russian bank, so they have no legal issues, and plenty of interest in taking a slice of allofmp3's business. The various issuing banks are individually anonymous in the situation, they figure their only responsibility is to make sure that the transactions are not fraudulent -- mainly because they don't want to end up potentially footing the bill for the fraud. The clearinghouses just want to push transactions from point A to point B.

Each player can point to the others and say that it ought to be their decision as to whether or not payments from a certain merchant should be accepted. The most logical decisionmaker as to the legitimacy of the merchant is the acquirer -- and that's the Russian bank for whom there's no legal issue!

I find it quite surprising that Visa International decided to step in and order their members (the organizations who pay them!) not to accept allofmp3.com payments.

Re:AllOfMp3.com's Legality (or lack of)

[yppiz]

Correct me if I'm wrong, but I believe Visa (the corporate entity) also runs VisaNet, the network over which Visa transactions are sent, and charges a small fee per transaction.

Also, here is an excerpt from the Wikipedia entry for Visa decribing Visa's complex corporate structure.

*

Legally, Visa comprises four non-stock, separately incorporated companies that employ 6000 people worldwide: Visa International Service Association ("VISA"), the worldwide parent entity; Visa U.S.A. Inc.; Visa Canada Association; and Visa Europe Ltd. The latter three separately incorporated regions have the status of group members of Visa International Service Association, whereas the unincorporated regions (Visa Latin America [LAC], Visa Asia Pacific and Visa Central and Eastern Europe, Middle East and Africa [CEMEA]) are divisions within VISA.

--Pat

Re:For everything you want to buy...

[igny]

Mastercard cut off AllofMP3 as well.

Re:For everything you want to buy...

[NetDanzr]

That's where paying through third parties comes in. I've been using XROST for over a year when recharging my Allofmp3 account, and that method has been always working well. Similar system has been working with sports betting sites for a while, and given how easy it is to reroute money I don't think non-US based businesses will have to shut down anytime soon.

Re:For everything you want to buy...

[chill]

Mastercard cut off AllofMP3 as well.

No, they didn't. Mastercard is the only credit/debit option that works, as of 5 minutes ago.

Reminder: AllofMP3 uses broadcast rules

[Uninvited Guest]

FWIW, remember that allofmp3.com claims to be "broadcasting" music on demand over the Internet, under the broadcast laws in Russia. Allofmp3.com pays its royalties based on those broadcast rules. This is similar to how ASCAP, BMI, and SESAC work with broadcast radio stations in this country; the royalties are sent to an agency which distributes the proceeds directly to the artists. The RIAA and others are claiming that allofmp3.com is duplicating and distributing recordings without paying for the rights to do so. Depending on how Russian law on broadcast rights is worded, allofmp3.com may be perfectly legitimate.

Re:XROST?

[NetDanzr]

XROST is simply an on-line gift card shop. You purchase a gift card, and get a card number and pin code in return. You input this information into Allofmp3, and your account is recharged.

Not so long ago, XROST still worked with PayPal. Currently, it works primarily with prepaid cash cards - the type you mention - but also with Click&Buy, which is available in the US. I've got family in Europe, so for me it's easiest to Skype them and ask for one of the cash cards.

Re:For everything you want to buy...

[Balthisar]

Just tried my Mastercard, and then I stopped. It looks like payments are now being outsourced to some place called www.e-centru.com, which is in Moldova. I don't remember ever being redirected to another payment site in the past, although it's showing that I last recharged my account on March 17th, 2005 (I don't buy a lot of music [or pirate it for that matter]). Anyone else ever been directed to this company to accept payments? It *is* showing just Mastercard as an option.

Well... here goes. That's what fraud protection is good for.

Well, it worked. Now I've got to figure out $25.25 worth of music that I want. I wish they had audiobooks.

Re:For everything you want to buy...

[dmitrygr]

Actually, if you go to alltunes.com, and register there, the balanace is shared with allOfMp3 (you can refill it at alltunes, and use at allofmp3), AND alltunes STILL works with visa (as they use a 3-rd party processor "CHRONOPAY")