Universal sues Russian Internet provider

Akado lawsuit filed for unpaid license fees

MOSCOW -- Universal Music Russia is suing a local cable TV and Internet provider for failure to pay a license fee for content owned by Universal.

The Moscow-based cable operator Akado signed an agreement with Universal last year, while preparing to launch its online music service, but later suspended the project because of the economic downturn.

Dmitry Konnov, general director of Universal Music Russia, confirmed that the company is suing Akado for unpaid license fees. "The hearing date is set for late August," he said. "But in the meantime, we are negotiating with Akado a goodwill agreement or out-of-court settlement. If we don't come to an agreement, we'll see each other in court."

A spokesman for Akado confirmed that the two companies are in negotiations and that Universal's content was offered by Akado's online music service for a short period of time before the project was pulled. "But we consider it unfair, to pay any fees that don't correspond with actual sales of Universal's content," he comments.

However, Universal insists that a payment must be paid. "Our agreement stipulates that minimum guarantee fees should be paid within a certain time frame, regardless of anything else," Konnov said. "There is no stipulation regarding commercial operation of the project."

Meanwhile, Akado still plans to relaunch the service, using content from another partner. "We are conducting negotiations, looking for a partner that would demand fees based on actual sales of its content by our service," the company's spokesman said.