The intention to sue was announced yesterday.
Giving oral evidence to the House of Commons Select Committee for Culture, Media & Sport yesterday as part of an inquiry into New Media and the Creative Industries, BPI General Counsel Roz Groome was asked about the hugely-popular site which sells new albums by popular artists for as little as £1 each.
"AllofMP3.com is illegal under UK law and it is illegal to download from it," she said. "AllofMP3.com’s claims to be legal are false … Neither artists nor record companies receive any payment from the site."
Users of the site in the UK infringe copyright because they are downloading music that is sold without a licence. But the BPI said it is not targeting the users.
Groome said: "We are going to sue AllofMP3.com in the UK courts – we are going to seek a judgment not against the users of the site, but against the site itself."
In a statement provided to OUT-LAW last night, "the AllofMP3.com Administration" said the site operates "in full compliance with all Russian laws." It pointed out that there has been no decision by any Russian court contesting the site's legality.
It added: "The Russian site AllofMP3.com is not operating or advertising its business on the territory of any other countries."
However, John MacKenzie, a Solicitor Advocate with Pinsent Masons, the law firm behind OUT-LAW.COM, said this point is inaccurate. "The site is provided in English as well as Russian. New customers have to pick their country from a list. So a court in the UK would have no difficulty in finding that it is targeting UK consumers."
He explained that the question is not where the business is located but where the legal wrong is committed. "If there is a substantial wrong, the English courts will almost certainly step in," he said.
MacKenzie added: "The BPI's case looks solid. If you run an e-commerce site and want to avoid being subjected to the laws of another country, don't sell there. It's that simple."
Criminal proceedings against a former director of the site's parent company, MediaServices Inc., are underway in Russia. Moscow prosecutors are also investigating a current director, according to the IFPI.
There are likely to be substantial practical difficulties in enforcing any order against AllofMP3.com in Moscow. "The BPI might win an award for damages and an injunction – but may find that all its case achieves is to send a message to British consumers that the site is unlawful," said MacKenzie. "It may not stop the site without assistance from Russian authorities."