Music Industry Drops Copyright Suit Against Russian Music Site

May 23 (Bloomberg) -- Sony BMG Music Entertainment and other record companies dismissed their copyright lawsuit against Russia-based Internet music store AllofMP3.com, which was accused of distributing millions of pirated song files.

Members of the Recording Industry Association of America, a trade group, didn't say why they were voluntarily dropping the case in papers filed May 20 in federal court in Manhattan.

``The site is now defunct and out of business, the result of a successful anti-piracy initiative,'' Jonathan Lamy, a spokesman for the trade group, said today in an e-mail.

The complaint, filed in December 2006, called the site ``a notorious black market'' that made $30 million a year by directing Internet users to music files available for download, without giving any money to the record labels. The other record labels joining the suit with Sony were Warner Music Group Corp., Vivendi SA and EMI Group Plc.

The Web site said in August it would reopen after it had been shut by Russia a month earlier to ease entry into the World Trade Organization. The Bush administration, which called AllofMP3.com a ``poster child for Internet music piracy,'' said the Web site threatened Russia's entry into the trade group.

A Moscow court in August cleared former AllofMP3.com owner Denis Kvasov of copyright violations, citing insufficient evidence.

A visit to the Web site today found only links to news about the music industry.

A lawyer for AllofMP3.com said the site never deserved to be sued by the recording industry.

``They never correctly commenced the proceeding in the first place,'' John Crossman, who represented the site's owner, MediaServices LLC, said today in an interview about the dismissal. ``Maybe it was a rare triumph of good sense.''

The Web site had 5.5 million subscribers, who paid between 10 cents and 20 cents per song, compared with 99 cents charged by Apple Inc.'s online iTunes store.

The case is Arista v. Mediaservices, 06-cv-15319, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net.

To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net; Jennifer Sondag at jsondag@bloomberg.net.