LONDON (CelebrityAccess MediaWire) — News website Ars Technica is reporting that an agent of Russian music download site Allofmp3.com has been arrested in the UK in connection with a scheme to sell vouchers for the controversial site.
Allofmp3.com made waves in the online download community by offering DRM-free mp3 downloads from a vast catalog for extremely low prices, often as cheap as 10 cents per track. The rub however, was that they appeared to pay no royalties at all to the artists who created the music. As previously reported in CelebrityAccess, credit card companies stopped processing credit card transactions for the firm, putting a serious crimp in their revenue streams.
Allegedly, to end-run this prohibition, the company started offering 'vouchers' on Internet auction sites such as eBay, which would entitle purchasers to a number of downloads from the music site. A 25 year old man was arrested on Fraud Act charges following an investigation by IFPI and the BPI, the two leading UK recording industry associations. They reportedly hope that the arrest will have a chilling effect on other participants in the voucher scheme.
"Until a few days ago, I had never heard of the IFPI," said one reseller, who spoke on the condition of anonymity, to Ars Technica. "But yes, I am concerned about them now. Although my attorney assures me that reselling gift certificates bought from Allofmp3.com isn't breaking any laws, it isn't worth the possibility of engagement with their legal machine."
AllOfMp3 claims that it pays the Russian royalty collection firm ROMS but BPI claims that it members haven't received any payments from ROMS. – CelebrityAccess Staff Writers