If it wasn’t enough to lose their ability to use Visa and MasterCard to process payments for music sold on allofmp3.com, now the courts in Denmark have ruled an Internet Service provider must deny access to Allofmp3.com.
Following closely are court actions in Germany, started in 2005,  that  granted a preliminary injunction against Allofmp3.com and parent company MediaServices Inc., for offering music in that country without the copyright holders permission. Italy has shutdown Allofmp3.it as part of a criminal investigation and IFPI, which represents the recording industry worldwide, with over 1,450 members in 75 countries, including Russia, has suggested to British purchasers that they could be sued by the music industry for possession of unlicensed copyrighted material.
In the same realm, the Russian government currently has a case against MediaServices Inc., and an ongoing investigation into other allegations relative to copyright infringement, but based on Russian laws there appear to be limited actions available to the government to reel in MediaServices Inc. In April of this year one of the cases was dismissed.
This is creating big dilemma for Russia. They would like to join the World Trade Organization, (WTO), but the music industry has put a lot of pressure on the members of the WTO, in particular the United States. Those negotiations for WTO membership are ongoing, but still a ways off, and it is unlikely to be of much value to the music industry in the immediate future
Allofmp3.com has steadfastly maintained that it in compliance with the laws in Russia. Vadim Mamotin, a Director of Mediaservices, said that everything is licensed by the Russian Multimedia and Internet Society (ROMS) and the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR), in accordance with Russian law. The portion of the law he refers to is “compulsory licensing” that has been adopted by the Russian government years ago. It stipulates that licenses should be issued in a non-discriminatory manner to anyone who wants one on reasonable terms.
Perhaps the point of the problem is that ROMS and FAIR do not have legally issued licenses, to contract for, in the first place. A look into ROM and FAIR earlier this year, showed that although the organizations existed, they had no obligation to pass the collected royalties along to the rightful owners. Hence, through legislation, Allofmp3.com is allowed to operate inside Russia. Allofmp3.com appears to be completely legal in its home port.
So it seems that the music industry may have found the Achilles heel of allofmp3, its cash flow. By cutting off a major source funding, it may economically strangle MediaServices Inc and allofmp3.com. No cash, no sale, no operation.