Visa and MasterCard to AllOfMP3: No Soup for You!

[Damion Chaplin]

<div class='os_post_top_link'><a href='http://www.msnbc.msn.com/id/15323093/' target='_blank'>http://www.msnbc.msn.com/id/15323093/</a><br /><br /></div><i>"Visa International and MasterCard Inc. have stopped accepting credit card transactions for purchases of online music made on a Russian Web site accused of selling music illegally, officials for both payment systems said Wednesday. San Francisco-based Visa asked member banks not to process purchases from AllofMP3.com as of Sept. 1, said Simon Barker, a spokesman for the company. "The action Visa has taken is in line with legislation passed in Russia and with basic international copyright and intellectual property norms," Barker said... There was no mention of it by Mediaservices officials during an online news conference on Tuesday, although Vadim Mamotin, the firm's director general, said through a translator that the company's business dispute with major recording companies and other copyright owners "has hurt our business.""</i><br /><br />Well, good. I guess it's about time someone stepped up and actually did something about AllOfMP3.com. But what does it say about our society that the politicians and 'the system' are so impotent it takes the credit card companies to step in? What does that say about who's got the real power here? Just a thought... :wink:

[Vincent Ferrari]

Damion, I'd only argue that it's none of their business stepping in. They're acting as para-law enforcement by not allowing their customers to use their cards there. You can bet this had something to do with using musicians in endorsements or something similar.

On a side note: Love the Soundwave avatar. Looking forward to the movie next July?

[Felix Torres]

Actually, the reason VISA and MC are doing this is because of the recent law banning payments to online gambling sites. This particular law may or not survive legal challenges but the idea is out there; They know which way the wind is blowing and they want to avoid more attempts to legislate who they do business with. (They might find themselves forbidden to make payments to fast-food companies in Chicago because the stuff is no good for you.)

Allofmp3 is on the pols radar and they're pressuring Russia to shut it down if they want in on the WTO.

Add the two and you'll see the credit card companies figured they'd try to get a few brownie points by "voluntarilly" doing what they were going to be forced to do anyway and maybe the idea would go away.

And Allofmp3 is an easy target because nobody is about to defend their blatant thievery.

[Phronetix]

Damion, I'd only argue that it's none of their business stepping in. They're acting as para-law enforcement by not allowing their customers to use their cards there. You can bet this had something to do with using musicians in endorsements or something similar.


There is a double entendre to their actions IMO. One the one hand, they look like pro-music industry guardians. On the other hand, and what likely prompted the pull, is their bottom line. I suspect that a good amount of fraudulent purchasing went on through that site, and the companies were no longer willing to give AllofMP3 the privilege of taking their cards. I also had reservations when I signed and purchased credits as to whether I had visited only secure sites throughout the process, so you can bet others had words with their credit card issuers.

As for Felix's post on the online gambling site payment blockage, I wasn't aware of that at all. I don't see a straight line between the legislation and their actions though.

An as for my account, for which I received criticism from folks in the past... It has remained all but unused except for tunes i could not get on the iTMS. That was before I found out the artists weren't seeing any royalties, so I have since bought the disks for those four purchases. After that and the ceremonial cleansing, I felt better. ;-)

[Vincent Ferrari]

I'll go you one further. You know what I use mine for?

To get copies of stuff I bought on iTunes but can't use in anything because of DRM and don't have the time to do a 1:1 rip of.

Not exactly a nefarious use.

There are legitimate uses for AOMP3.

[Obake]

At the moment AoMP3 is a 'legit' business in their country. I don't think Visa or MC have a right to cripple a business this way.

Sounds like a case of guilty before proven innocent and RIAA/MPIA pressuring Visa/MC with 'threats'.

All that's going to happen is AoMP3 is going to use another name for transactions and it's going to take time for Visa/MC to find out (get told by RIAA) and get the word out to banks.

[Dyvim]

I'll go you one further.

I'm not sure if this is one further or not, but I used AOMP3 to get "Hotel California" (the song, not the album). I own the physical CD, but for some reason, I could never rip that 1 track no matter how many different applications I tried - must be something screwy with the CD even though it plays just fine. So now I finally have a "complete" copy of the album in iTunes and I don't feel bad about it. (I could have purchased it from iTunes, but I thought I deserved a DRM-free CD-quality track considering that I own the CD.)

[Vincent Ferrari]

I just thought of something... Everyone is patting Visa on the back for pulling authorization from AOMP3... Well, since they've now fancied themselves as content police, what about porn?

I mean, suppose you like your fair share of porn. What if Visa and MC decided no more porn payments? You can no longer use your card to pay for it because they find it objectionable?

As far as we know, and seeing as they're still around years after they were first discovered, AOMP3 is at least somewhat legal or it would've been down already. The question is, how would people feel if Visa and MC started not supporting other businesses that were legal?

Makes ya wonder.

[Felix Torres]

Uh, porn is legal...
Distateful to many of us, but perfectly legal for adults.
Now, kids, is a different matter and a very good way to keep online porn out of kids' hands is requiring a credit card number. Even for otherwise free content. Plenty of businesses use credit cards as a proof of identity so the credit card companies are already in the filtering customers business. It's just another service they offer for their slice of the money.
So that turns out to be a non-sequitor, guys.
Morality doesn't enter into it; just the letter of the law.
Porn is legal content for adults but Allofmp3 content is unlicensed and hence illegal.
That simple.
They charge money for something that doesn't belong to them, much like a fence or a counterfeiter. Anybody buying from them is/was buying stolen goods. They stayed in business only as long as their bought-and-paid-for russian bureaucrats kept foreign lawyers off their backs. Once it became an issue in the WTO talks, their fate was sealed.

For those bemoaning the shutdown, I'm sure a replacement will pop up soon enough, though. Kim Jong Il is probably beta testing it in North
Korea even as we speak. :twisted:

[Vincent Ferrari]

You missed the point.

Legal or not, we have Visa and Mastercard deciding on what you can spend money on. What if they decide they don't want you spending money on porn any more, despite it's legality?

Remember, we're not talking about the legality of AOMP3. It's more like if a site is open and at least, for now, legal in the country it's operating in, Visa and Mastercard have no place telling you that you can or can't spend your money there.

Letter of the law is wonderful, but when you're dealing with international transactions, whose law is it? It's easy to just chalk AOMP3 up to some blackmarket bought off government shlubs, but that's not seeing the bigger picture. If this is the be all and end all for you, more power to you.

I think it's pretty reprehensible.

Now as for the buying of "stolen goods," that argument is just flat out laughable. I didn't "steal" anything. I owned every track I bought. I just prefered the convenience of having them rip it for me.

Another poster here owned the actual cd and wanted a rip he couldn't get to work. Is that every user? Obviously not, but it doesn't have to be because your argument is that every person using the service is stealing. That's simply not true.

[Phronetix]

I disagree with you vincenzosi. The credit card companies aren't choosing anything for us. They have a business to run as they see fit. VISA and MC have the right to allow whichever vendors they wish use their service. For a vendor, being able to accept MC and VISA for transactions is not a right.... it is a privilege, and a service. A service that AllofMP3 is expected to pay 3% of the purchase amount back to the credit card providers as the cost of that service. If AllofMP3 does not pay that back, or pay it back in time, then the credit card companies pull the plug.

On the other hand, if a credit card company does not prefer to make money from an activity it judges to be illegal, then they are doing the right thing by pulling their service. As for porn and gambling sites, that'd be a judgement call.

Besides, this does not put AllofMP3 out of business, but it will be a lot more inconvenient for it's users to pay.

Anyone know if AMEX has been involved in this?

[Vincent Ferrari]

On the other hand, if a credit card company does not prefer to make money from an activity it judges to be illegal, then they are doing the right thing by pulling their service. As for porn and gambling sites, that'd be a judgement call.

Actually, it's all a judgment call, isn't it? They're acting as para-law enforcement here. You said it yourself... It's something "they" judge to be illegal. Who the hell are "they" to judge the business practices of a business? I'm sure customers didn't complain, so who's left?

The people who they pay for endorsement deals.

Screw 'em. I'll pay using PayPal, which, incidentally AOMP3 takes, and I fund with my Visa card.

Way to cut that business off, Visa.

[Felix Torres]

Legal or not, we have Visa and Mastercard deciding on what you can spend money on. What if they decide they don't want you spending money on porn any more, despite it's legality?


Actually, they would be perfectly within their rights to do so.
They lose the 4% commision but they're entitled to do so.
You may not like it but that's the reality.
Credit card networks are *not* utilities.
They *don't* have to service everybody and anybody.
They can (and do) refuse to service retailers the world over.
Dealing through Visa, MasterCard, America Express or what-not is a privilege, not a right. They can apply whatever standards they like.
And they do have standards (very low standards actually; they did business with the allofmp3 thieves for quite a while before bowing out, after all).

BTW, porn is a 64 billion dollar a year business.
4% of that is A whole lotta money(tm).
No credit card company is going to turn their back on the likes of TimeWarner, Comcast, and the other big-time pornographers over such a petty thing as morals.

See, the allofmp3 thing is not about ethics; it is about legal exposure.
Some folks are just too unsavory to be associated with.

[Phronetix]

Of course it's a judgement call. And they are allowed to make whatever moves they wish. I think it's about dollars and cents rather than ethics. But that is the cynic in me speaking.

Of course, a move like this could backfire. Let's say that VISA decides to pull themselves from the iTMS, for whatever ill-conceived reason, this move would likely face a negative reaction from consumers. And... may in fact benefit MC the most.

In the same way that Paypal is grinning from ear to ear.

D

[Vincent Ferrari]

Let's just put badges on 'em then and get it over with. I can see it now...

Guardians of the law... Vindicators of good.

Visa... Your law enforcement experts.

[Vincent Ferrari]

Oh, and just to restate the obvious...

It has yet to be proven that AOMP3 is actually doing anything illegal so theoretically they could stop letting you use your card on porno sites just 'cause they want to.

[Damion Chaplin]

Woo-hoo! Hot topic! :D

A service that AllofMP3 is expected to pay 3% of the purchase amount back to the credit card providers as the cost of that service. If AllofMP3 does not pay that back, or pay it back in time, then the credit card companies pull the plug.

Yep, that's what's allowing them to do this in the first place. As credit card companies, they decide who they want to do business with and there's nothing we (as consumers) can do about it. If they decide they don't want to support the pr0n industry, that's their call. We'll just thank our lucky stars they're not that conservative yet.

Visa. It's everywhere you want to be... that we agree with. :wink:

[Obake]

very hot topic, and interesting views both ways.

about porn, what about underaged porn. it's legal in a few countries but not in america. should visa/mastercard stop taking their money? maybe not the best example, but its legal.

and it IS a judgment call. like the above example, aomp3 is LEGAL in their country, which is how they can still be running a 'business'. if it weren't legal i'm sure their government would shut them down.

and someone brought up paypal, they're even worse then visa. they ban sites all the time for porn. i think it was somethingsawful.com (wink :)) got blacklisted by paypal because they have pornographic content, but they are not a porn site.

[Felix Torres]

Oh, and just to restate the obvious...

It has yet to be proven that AOMP3 is actually doing anything illegal so theoretically they could stop letting you use your card on porno sites just 'cause they want to.

Theoretically pigs can fly.

A bit more realistically, allofmp3 has been violating the laws of several countries and hiding behind the (assumed) lack of illegality of the deed in *their* country. The fact that somebody finds their service of providing unlicensed content useful does not negate the fact they have no right to sell that stuff. They don't own it. Period. They don't even deny it. They just simply say no law in *their* country explicitly forbids it even though it *is* illegal to traffic in *other* kinds of unlicensed content in Russia.
Well, that loophole is going away; so VISA et al wouldn't be making money of them much longer so the equation changed. Instead of a valued customer they were becoming a liability.
Companies drop liabilities ASAP.
Simple and straightforward.

Do consider that when cops go after traffic in counterfeits and stolen good, *everybody* in the chain is liable. There is such a crime as accepting stolen goods. And established legal precedent in most countries equates unlicensed content with theft.


It is not at all surprising they discriminate against one kind of traffic (unlicensed music) and not another (porn) consider they are much more likely to be sued for aiding and abetting allofmp3 than for helping Time Warner, Comcast, or Playboy. It is not about morals or imposing their own values on anybody; it is about complying with a changing legal situation.

Playboy channel is Legal; they own the content they provide; allofmp3 isn't because it doesn't. That the credit card companies *ever* serviced allofmp3, even knowing it was illegal is the real crime here, not that they stopped doing it.

Why the content is purchased or what the excuse for buying it doesn't matter; its all about the money and the rights. Take or give money for something you don't legally own and get caught doing it and you'll be needing a lawyer.

Don't like it?
Change the law.

Until then, live with it.

[Damion Chaplin]

That the credit card companies *ever* serviced allofmp3, even knowing it was illegal is the real crime here, not that they stopped doing it.

Agreed!

Although I'm currently unaware of any theory stating pigs can fly... :wink: