Accused

The site offers downloads at far lower prices than mainstream businesses like iTunes but has been consistently accused of breaching copyright and royalty laws.

Mediaservices, the parent company of AllofMP3, has always maintained it obeys Russian laws and pays royalties to a local organisation, the Russian Multimedia and Internet Society (Roms).

But many Western authorities do not recognise this organisation and refuse to accept its offers of payments.

As part of protracted negotiations over Russian entry to the WTO, an agreement has been published regarding website regulation.

Business changes

Part of the summary reads: "The United States and Russia agreed on the objective of shutting down websites that permit illegal distribution of music and other copyright works.

"The agreement names the Russian-based website AllofMP3.com as an example of such a website."

The US has called for legislation to carry this out to be in place by 1 June 2007.

A spokesman for Mediaservices denied the site was about to be closed, insisting it was legal under Russian law.

But he admitted there could be pressure for a change in that law.

"It is important to note that legality can only be determined by the courts, not governments, and no court has adjudicated a case against the company.

"The company is fully committed to its business and will alter its business model to fit within the new legal framework, whenever it is ultimately set," he said.