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Visa and MasterCard have stopped accepting credit
card transactions for purchases of online music made on AllofMP3.com. For those not familiar with the situation, AllofMP3 is a Russian Web
site being accused of selling music illegally. The site typically charges under $1 for an entire album or around a few cents per song, which is significantly less than Apple’s iTunes Music Store among others that typically charge about $10 per album or 99 cents per song.
Simon Barker, a spokesman for Visa said, “The action Visa has taken is in line with legislation passed in Russia and with basic international copyright and intellectual property norms.”
Chris Harrall, a spokesman for Mastercard said, “MasterCard does not tolerate the use of its network for illegal activity.”
On Wednesday, AllofMP3 posted a notification on its site explaining that credit card payments were not available at the moment. Interestingly enough, the site directed prospective customers to another site (alltunes.com) to make Visa/MasterCard payments there for transactions on AllofMP3. Sneaky. But Visa shut down payment processing for that site as well as of October 1.
AllofMP3 claims that by paying royalties to a Russian licensing group, the site is in compliance with Russian laws. The music industry, of course, has explained that the Russian licensing group doesn’t have the authority to collect and distribute royalties. Such is the drama in a technological world with shrinking borders.