US record companies filed suit in New York against Allofmp3.com, the Russian website that sells copyrighted recordings for a fraction of the price charged by legitimate vendors. The Russian company says it's legit because it pays royalties to the Russian Multimedia and Internet Society, reports Out-Law.com for the Register.

"Defendant's entire business amounts to nothing more than a massive infringement of plaintiffs' exclusive rights under the Copyright Act and New York law," says the law suit.

Unlike US and British royalty collecting agencies, the Russian version pays no royalties to artists or record labels. Yet the Russian Multimedia and Internet Society ROMS itself says the site is legal because it licenses it.

"Allofmp3.com's activity is quite legitimate," ROMS general director Oleg Nezus told BBC Russia earlier this year. "The opinion of foreign copyright owners is just that - their opinion."