PayPal has partnered with the City of London Police to help prevent payments being made to illegal music download services.
Such services, many of which operate from Russia or the Ukraine, often offer unlimited music downloads for a monthly fee, but pay no royalties to artists or record labels. This is achieved by exploiting lax copyright laws in host countries, despite the services being offered to foreign users.
Credit and Debit card providers Visa and MasterCard have already withdrawn their payment services for a large number of these sites earlier this year, and PayPal's announcement is sure to dent these websites' cash-flow too.
'We knew that when illegal online music services could no longer take payment from credit cards they would try to work around the restriction
,' said Frances Moore, chief executive of the International Federation of the Phonographic Industry (IFPI). 'That is why we and the City of London Police approached PayPal and I am delighted to say they responded instantly and positively
PayPal will withdraw its payment services from download providers that do not submit proof of licensing, with 24 sites already affected and 38 more under investigation.
However, such services still operate in a legal grey area in their home countries, so it's unlikely they'll be taken down permanently.
Do you think PayPal is right to withdraw its services? Is such a withdrawal of payment services from illegal operations long overdue? Let us know in the forums