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Allofmp3.com, a popular download site that has been branded by the US as one of the world’s most “notorious markets” for illegally copied music, has come under further pressure after Visa International said it would stop processing credit card payments from users on the site.

Recording industry groups have railed against the service, which sells albums from an array of popular artists for as little as $1 to $2 and individual songs for between 3 cents and 10 cents, compared with 99 cents for a single song on Apple Computer’s popular iTunes music store.

The site’s operators say the business is legal because it pays taxes in Russia and pays 15 per cent of its revenues to the Russian Multimedia and Internet Society, which licenses online stores.

Allofmp3 struck a defiant note in a press briefing on Tuesday. Vadim Mamotim, director general of Mediaservice, the company that operates Allofmp3, argued that the service was legal under Russian law.

He said the company was seeking direct negotiations over royalties with record labels, adding that ROMS, which operates Russian online store licenses, had offered to pay pay royalties to music companies but had “been rebuffed”.

Copyright societies around the world have protested that they never entered licensing agreements with ROMS.

The record industry has won a series of legal victories against peer-to-peer file-sharing services in the US that have forced many to either shut down or convert to a legitimate business model. In July, Shamran Netowkrs, the owners of KaZaa, one of the most infamous file-sharing services, agreed to pay $115m to settle legal action brought against them by the Recording Industry Association of America.

Yet experts warn that new services have established themselves in country’s with more lenient copyright laws. One of the most popular, Pirates Bay, is based in Sweden. “It’s kind of like a game of whack-a-mole,” said Eric Custer, a partner at Manatt Phelps and Phillips. “Ever since Napster, you have all these other services popping up.”

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