By way of Ars today came an article that Visa will no longer allow consumers to use AllofMP3. If you are not familiar with AllofMP3 they are a Russian website that sells MP3's DRM-free (no copy protection) for very, very cheap. Full CD's go for $2-$5 dollars US. They have been around for years and are a constant thorn to the RIAA which wants to control all sales of digital music by enforcing DRM on every song. This leaves consumers with a song that works on an iPod or Windows Media Player, but not both. The myth that DRM helps anyone (and I mean anyone) is for another post.
So how does AllofMP3 stay up? We'll, they are legal in Russia. From their FAQ:
Is it legal to download music from AllOFMP3.com?
The availability over the Internet of the ALLOFMP3.com materials is authorized by the license # LS-3М-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.
There is the great unanswered question of the Internet: how do you apply local laws to something that is not local? Better question, can you even do it if you should? Worse question, how can you work outside of the law to get the result you want? If your the RIAA, strong arm Visa into not support the site.
I must state I've seen nothing written this is the case, but this has RIAA stink all over it. Visa doesn't really care what you buy, never has. They have only cared if there are a high rates of charge-backs from the vendor's customers - common for porn and gambling sites. Even then, it's often left to the bank backing the Visa card to decide if they will exclude certain sites. Visa looks at the bottom line - and that's where the RIAA has pull; they could hurt that bottom line in excessive lawsuits. Would they do it? Yes, that's exactly what the RIAA does - sue people.
As proof this is not the way to go, AllofMP3 is considering alternate revenue services now - like giving away music for free. The files would have to be played in a special player that would require the listener to deal with some ads. This may sound like RIAA would win here - after all no one will want ads in their music they couldn't copy or burn, but there is a fact of technology the RIAA still does not understand. If you can play it, you can copy it. The time while AllofMP3 gives music away for free people won't need Kazaa and you can bet the pipes coming from Russia, with love, will be glowing hot.
Update: This article also appears on KnoxViews