Controversial music website Allofmp3.com is being sued by a collection of record labels. The suit has been filed in a New York court against the Moscow firm, which claims that it abides by Russian law.

"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.

Arista, Warner Brothers, Capitol and Universal are among the major companies behind the suit. It claims that Allofmp3.com profits by selling music which they own the rights to without their permission and without compensation.

When an online retailer sells music it typically pays royalties to artists via a collecting society such as the Performing Rights Society (PRS) or the Mechanical Copyright Protection Society (MCPS).

source:  http://www.theregister.co.uk/2006/12/21/us_labels_sue_allofmp3/