The Recording Industry Association of America (RIAA) issued a statement earlier this month showing that in music markets such as Russia and China, “the levels of piracy are so great that they essentially eclipse the output of the legitimate sector.”

Commenting on this year’s broader annual “Special 301” report to the U.S. Trade Representative (USTR) on more than 40 international music markets, filed on February 8 by the RIAA and its International Intellectual Property Alliance (IIPA) umbrella, RIAA executive vice president Neil Turkewitz said that “much of the potential of new technologies to drive expansion of music production and distribution, and the jobs that go with that, is [being] undermined by the extent of unfair competition in the online marketplace.”

The RIAA says that Russia’s legal national music market actually contracted in 2011 (the last year for which sales numbers are available) by 30%, to a total value of “a mere $76 million – less than the value of the music market in Poland,” in spite of the wide presence of legitimate music platforms such as Beeline, iviMusic, Nokia Music, iTunes, and many others.

The Association lays the blame for “this woeful performance” on VKontakte, or, the leading social network in Russia, which the USTR identified once again last December as one of the world’s hotbeds of piracy and which the USTR says is “still operating despite several Russian court rulings against it.”, Russia’s second largest social network, run by Group, “also operates an unlicensed music service,” the “Special 301” report on Russia found.

“Despite the accession to the WTO and the signing of the U.S.-Russia IPR Action Plan, 2012 was a year where little concrete progress was made in Russia on either legal reforms or, more importantly, enforcement,” the report states. That prompted the RIAA to demand that “the Russian government complete pending legal and regulatory reforms… and that they take action against VKontakte and others so that legal [music] platforms have an opportunity to compete on a fair basis.”