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Choking Off Payments to Online Music Pirates

IFPI announced that the recording industry is working with MasterCard, Visa and the London (UK) police to address the illegal online sale of unlicensed music.

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Unedited press release follows:

Recording industry welcomes support by payment providers to tackle illegal online sale of unlicensed music

London, 2nd March 2011 – The international recording industry has recently engaged with MasterCard, Visa and the City of London Police to extend cooperation in tackling illegal online services selling unlicensed music worldwide.

Illegal websites, often based in Russia and Ukraine, have been infringing the rights of artists, songwriters and producers for several years by selling tracks and albums without paying anything to those who created the music they sell.

Under the arrangement IFPI can secure action by police against websites that infringe its members’ rights. Details of 24 copyright infringing music services have been handed over to the police to date.

IFPI’s anti-piracy investigators supply the City of London Police’s Economic Crime Directorate with evidence of illegal downloads made from an infringing site. Once the police have verified the evidence, they notify MasterCard and Visa who require the acquiring bank providing the retailer with payment services to produce evidence of appropriate licenses to sell music or cease providing those services to the retailer. To make sure the new system works effectively in practice, MasterCard has committed to deal with requests involving law enforcement expeditiously.

Industry anti-piracy experts have drawn up best practice procedures for MasterCard and Visa, to distribute both internally and to banks that use their services, which help identify infringing websites and prevent them from being granted card payment facilities.

Unlicensed music websites have operated out of Russia and Ukraine for several years. They sell tracks and albums to an international audience at low rates, made possible because they do not pay rights holders for their work. These websites appear in English and contain details of the latest music charts in markets such as the US and UK.

Frances Moore, Chief Executive of IFPI, said: “It is extremely positive for the recorded music industry that the world’s largest payment systems are taking steps to prevent their services being abused by illegal websites that infringe the rights of artists, songwriters and producers. Intermediaries, such as MasterCard and Visa, can play a key role in tackling online piracy wherever it originates around the world.

“We commend the City of London Police for the key role it is playing in coordinating the programme. This demonstrates that it understands the damage these rogue websites are inflicting on jobs and growth in the UK and around the world.”

“MasterCard is pleased to support IFPI and law enforcement to help prevent the illegal sale of unlicensed music,” said Eileen Simon, Chief Franchise Development Officer, MasterCard Worldwide. “A coalition approach such as this will enable us to prevent our system from being used to carry out this illegal activity and will help protect the livelihoods of artists, legal rights holders and legitimate e-commerce merchants selling properly licensed material.”

Steve Wilson, Vice President – Payment System Risk, of Visa added: “Visa is pleased to continue to assist, support and enhance its ongoing relationship with the IFPI and the music industry. Visa has always prohibited the sale or purchase of illegal goods and services through its payment system, and this collaboration is a tangible demonstration of this commitment.”

Detective Chief Superintendent Steve Head of the City of London Police Economic Crime Directorate said: “This is an excellent example of how the police can work with different business sectors to effectively tackle the impact of economic crime, in this case music piracy. It demonstrates the benefits of innovative and focused partnership working and I am confident that it will greatly assist in preventing this criminal undermining of the music industry and all of those whose livelihoods depend upon it. We will continue to support initiatives such as this as we seek to develop a broad range of tactics to prevent crime being committed, no matter where in the world these criminals may operate from.”

About IFPI
IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,400 major and independent companies in more than 66 countries. It also has affiliated industry national groups in 45 countries. IFPI’s mission is to promote the value of recorded music, safeguard the rights of record producers and expand the commercial uses of recorded music in all markets where its members operate.