Tuesday, May 22, 2007

AllOfMP3.com declared fraudulent

Interesting story - the IFPI raid an agent of AllOfMP3.com, the infamous Russian-based illegal download service, in London.

"The individual was allegedly the UK-based European agent for allofmp3.com, facilitating the sale of digital downloads by advertising and selling vouchers through auction sites such as eBay and the website allofmp3vouchers.co.uk. That website has now been taken down from the internet. The vouchers contained a code that allowed UK and European consumers to access and download music illegally from the allofmp3.com website.

Charging £10 per voucher, the suspect was believed to be taking payment from European customers and transferring the cash into various offshore accounts operated by the site's Russian owners.

Metropolitan Police officers seized computer equipment and paperwork for further investigation. Early indications suggest the pirate operation may have generated criminal proceeds for the Russian website running into tens of thousands of pounds."

It is worth noting that the police executed the raid not under copyright law per se, but under Section 2 of the Fraud Act 2006 - legislation introduced into UK law in January 2007 specifically to combat online fraud. IPRED 2 was *not* involved. The 2006 Act makes it a criminal offense to dishonestly make a false representation for gain. A fales representation is one that is untrue or misleading and the person making it knows this. This is reportedly the first time the new fraud legislation has been used in a copyright-related case.

Interesting on two counts therefore. First, this is a good example of how even operating in a law haven like Rusia cannot necessarily save your business model in more lawful jurisdictions, when payment intermediaries are squeezed - Visa, Mastercard and even PayPal had ceased "laundering" payments to AllOfMP3.com from the UK making it almost unuseable by the average UK punter. (One wonders about Google Checkout?) . Similar strategies have been adopted successfully by the US to throttle online offshore gambling services offered to US nationals by countries like Antigua.

The legal liability of these payment intermediaries for providing funds access to AllOfMP3.com of course remains untested, as far as Pangloss knows. Would they be secondary infringers in UK copyright law, or "inducers" of copyright infringement in the US, a la Grokster? This must be the fear , but it would be nice to have had it judicially examined.

Secondly, the 2006 Fraud Act provisions were, it was thought, introduced to deal more effectively with "phishing", not copyright infringement - but it seems they have now been appropriated to that context. In Scotland where the 2006 Act does not operate, it is likely the existing common law of fraud would cover similar action. Is it fraud to take money in exchange for illegal services? One might argue that the punters were not being defrauded as they were getting exactly what they asked for , namely, downloads of music. Compare phishing where there is clear deception. The police/BPI argument would be that the punters are being deceived that what they are buying is legal in the UK. That, to Pangloss, seems in itself, rather deceptive:-)

1 comment:

Anonymous said...

There are many internationally based web sites like Allofmp3 which offers music download service, and are continually coming under pressure from other countries to shut down. i know more 19 store or service that provides the best digital music experience at lens http://www.squidoo.com/review_russianmp3site .