The labels take matters into their own (lawyers') hands

Major record labels, including Arista Records, Warner Bros. Records, Capitol Records and UMG Recordings have launched a lawsuit against claiming that the Web site has been selling music in violation of copyright.

The labels claim in the lawsuit that Russia-based Mediaservices, parent company of, profits off copyrighted music without paying any royalties to the holders. Instead of paying royalties to the record labels, Mediaservices shares a cut of its revenue with a Russian licensing group, which the company claims is in complete compliance with local laws.

"Defendant's entire business ... amounts to nothing more than a massive infringement of plaintiffs' exclusive rights under the Copyright Act and New York law," according to the lawsuit. The music labels seek a court order against Mediaservices and unspecified compensatory and punitive damages, report the Associated Press.

Mediaservices is having a very rough second half of the year. In July, the British Phonographic Industry sued AllofMP3. In October, AllofMP3 lost its Visa and MasterCard portal, and the company has since had to rely on credit proxy Xrost. Just last month, U.S. government announced a joint program with Russia in an effort to thwart piracy, with as a prime target., however, maintained its stance of operating legally and has yet to alter its business.

Source: DailyTech

Additional info at Neowin.Net