A RUSSIAN music download website stands in the way of the country’s long-cherished ambition of joining the body that governs world trade, it emerged yesterday.

The United States has singled out the site, allofmp3.com, as an obstacle to its support for Russian membership of the World Trade Organisation (WTO).

Susan Schwab, the US Trade Representative, wants Russian authorities to close the site, which America regards as one of the world’s largest online repositories of pirated music.

But MediaServices, the Moscow company running the service, insisted yesterday that it complied with Russian law on copyright protection and actually helped to prevent piracy. It accused US officials of seeking to protect American online music providers from Russian competition.

The website, which has 5.5 million subscribers, sells individual songs for between 10 and 20 US cents each, compared with 99 cents at Apple’s iTunes store. Fans of the Beatles, for instance, can download Back in the USSR for a mere 13 cents from a library that contains some 850,000 songs.

The website claimed to have signed up thousands of new customers since Ms Schwab criticised it in Washington on Wednesday. She said: “I have a hard time imagining Russia being a member of the WTO with a website like that operating.”

Ilya Levitov, a company spokesman, told The Times: “We are getting more than 5,000 new customers a day. The problem for the Americans is not copyright but our business model and our prices, which are killing their business.

“We sell songs for 15 or 20 cents and they want to keep their CD prices. Of course, the American Government is trying to help their companies to get richer. If we sold songs for $1 there would not be any problem, but you can’t sell music here at that price. It would be the same as two bottles of vodka for one song, and nobody in Russia can afford that.

“We understand that the Americans don’t like it, but we are not breaking any laws here. We are a Russian company operating in Russia and this is just double standards.”

The WTO sets the rules for the global trading system and resolves disputes between member states. The organisation, which has 149 members, aims to increase international trade by promoting lower trade barriers.

Membership negotiations with China took more than 15 years before agreement was reached. Russia first applied to join a predecessor body in 1993, and is the only major economy that is not a WTO member. The US is the last major opponent of its membership.

Russia had hoped to win US support ahead of the G8 summit in July, but the two governments are still in fraught negotiations on outstanding issues. The dispute has become a major obstacle in the personal relationship between Presidents Putin and Bush.

Ms Schwab’s comments made clear that intellectual property rights continue to be one of those issues. The download site was set up in 2000 by six computer programmers, who initially developed it for their own use. Mr Levitov said it evolved into a business as its popularity grew.

Most subscribers are Russian, but it also has a large international following and is claimed to be the second most popular source of downloads in Britain after iTunes. The site displays a licence from the Russian Organisation for Multimedia and Digital Systems (ROMS), an industry group that manages property rights in Russia. Mediaservices said that it paid a percentage from each download sale to ROMS, which then forwarded the fee to the copyright owner.

However, Western music companies have refused to accept the fee, arguing that ROMS has no right to represent their interests in Russia. The IFPI, the international music industry body, has begun legal action in Moscow against two of the site’s directors, Vadim Mamotin and Denis Kvasov, to halt operations.

The company is reluctant to discuss its earnings, but Russian Newsweek recently estimated revenues at $30 million a year. Mr Mamotin told the Moscow Times that the music industry was losing more money in free file-sharing networks. “We are offering a model under which people will walk away from piracy,” he said.

allofmp3.com Top 10 albums

1 FutureSex/Love Sounds — Justin Timberlake
2 Ta-Dah! — Scissor Sisters
3 Sam’s Town — The Killers
4 Continuum — John Mayer
5 Revelations — Audioslave
6 Back to Basics — Christina Aguilera
7 Modern Times — Bob Dylan
8 Eyes Open — Snow Patrol
9 The Open Door — Evanescence
10 B’Day — Beyoncé

iTunes Top 10 UK albums

1 Sam’s Town — The Killers
2 Ta-Dah! — Scissor Sisters
3 Razorlight — Razorlight
4 The Open Door — Evanescence
5 The Information — Beck
6 Eyes Open — Snow Patrol
7 The Open Door — Evanescence
8 Undiscovered — James Morrison
9 Alright, Still — Lily Allen
10 The Pacha Experience — Various Artists

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