Original URL: http://www.theregister.co.uk/2006/10/19/allofmp3_attacks_visa_and_mastercard/

Blacklisted AllofMP3 slams 'capricious' Visa and Mastercard

'Patently erroneous and without legal merit'

By Drew Cullen

Posted in Financial News, 19th October 2006 23:45 GMT

Mediaservices, the owner of the controversial music download site AllofMP3, will pursue "every avenue" to overturn the decisions of Visa and Mastercard to stop processing payments to the company.

In a statement today, the Russian company said the blacklisting was "arbitrary, capricious and discriminatory". Visa and Mastercard had no authority to judge the legality of AllofMP3's services, and their "determination that the company’s activities were illegal is patently erroneous and without legal merit", it said. "AllofMP3 has not been found by any court in the world to be in violation of any law...To disqualify AllofMP3 based on a payment processing company’s whim is irresponsible and sets a bad precedence."

AllofMP3 is under fire from the world's music industry for selling music downloads at knockdown prices without the authorisation of copyright holders. According to industry estimates, the company turns over £20m a year and is the UK's second most popular music download site, behind iTunes, with 14 per cent market share. The hugely popular service says it complies with Russian law.

"Visa and MasterCard should immediately re-qualify AllofMP3," said Vadim Mamotin, Director General of Mediaservices. "There is no valid reason and absolutely no legal basis for the action."

Yesterday, Visa said it would no longer deal with AllofMP3, to reflect "legislation passed in Russia and with basic international copyright and intellectual property norms".

AllofMP3 claims Visa has "misinterpreted the new copyright laws because they do not require AllofMP3 to alter its business model. The new copyright laws do not prevent the online sale of music".

Today, Mastercard followed suit (although some Mastercard- carrying Reg readers report an inability to upload credits into their AllofMP3 accounts since July). It said it "does not tolerate the use of its network for illegal activity".

AllofMP3 replies: "If that is the basis for the company’s decision, MasterCard’s decision makes absolutely no sense since the company is a lawful business enterprise." ®