August 13, 2007, Fri 09:25 AM Internet
Alltunes.com, the Russian musical resource cut off the Visa banking card payment operation has been acknowledged illegal by the Moscow court. Now Visa is at a loss: on the one hand the foreign resources force it to stop operations with Allofmp3.com and its successors, on the other, the Russian court requires resuming the payment operations.
The Moscow Arbitrary Court has satisfied the suit of Internet-Audit, the Alltunes.com musical server owner, to Rosbank, the Russian agent of Visa, the international payment system and its affiliate United Card Services (UCS), the acquiring center. Alltunes is a computer and handset program, which makes it possible to buy digital music at rather liberal prices ($0.15 per song, $ 2 per album).
The server is not connected with iTunes, a popular foreign musical server, but it is of common roots with Allofmp3.com, closed not long ago. In particular, the resources had a joint clients’ base. Last year at the request of the International Federation of the Phonographic Industry (IFPI), Visa and Mastercard blocked payments through Allofmp3.com first, then through Alltunes, as they were accused of copyright infringement (the two servers operate on the basis of the license from the Russian societies on collective management without direct talks with the copyright holders). Alltunes did not agree to the mentioned decision and sued in court against the above mentioned Visa agents, who carried out the cut off.
Having tried the case, the court determined the unilateral rejection of the defendant to execute the acquiring contract (credit and debit card payment acceptance) concluded with Alltunes illegal. “The court can try the case on the copyright infringement under the exceptional right holder suit. Neither IFPI, nor Visa are such right holders”, - the judicial decision reads.
Visa that was the third party in the procedure told Reuters the passed judgment would not be appealed against. “We intend to proceed cooperation with the Russian Visa member-banks and hunting for an acceptable decision in relation to such resources as Allîfmp3.com and Alltunes.com, their activities considered ambiguous on the part of the RF legislation”, - the payment system representative explains. IFPI is very determined. “The court decision has not come into force, so we intend to appeal against it, - Igor Pozhitkov, the association Representation Office Head told CNews. – Unfortunately, the first instance court considered only the agreement between Alltunes and Rosbank, not taking into account the presented evidence that the intellectual property was used illegally by the given server owners”.
The e-commerce market participants approve of the court decision. “Having put pressure on Roasbank, Visa behaved incorrectly and infringed the business ethics principals, -Pavel Rublevsky, Chronopay payment system Acting Director outlines. Chronopay was a mediator in accepting payments through Allofmp3.com and Alltunes. – Visa is to cut off only those sites, which abuse law, for example, children porno sites. When there is a conflict of business interests then Visa is to observe neutrality”. However, Chronopay is not going to resume payment through Alltunes. According to the new rules of the mentioned payment system, it services only those musical resources, which have a license from the Federation on collective copyright on-line management. Alltunes has already received two licenses: from the Federation on collective copyright on-line management and its competitor the Russian society on collective copyright management in multimedia and digital networks.
If the court verdict is not repealed then Visa will get into difficulties. On the one hand, the Russian court obliged Visa to resume acceptance of payment through Alltunes, as the RF legislation allows to use the accepted by the server system of cooperation with right holders. On the other hand, the foreign right holders request Visa to cut off payment acceptance through Alltunes, which is actively operating through the internet beyond Russia. “Visa is likely to press Rosbank down under the threat to recall the credit card acquiring right, so that the bank does not resume credit cards payment through Alltunes under any conditions”, - one of the Moscow business lawyers says.