A complaint has been lodged by the Irish Music Rights Organisation (IMRO) to the European Commission against an aspect of US copyright law which exempts retail outlets paying royalties on music played on the airwaves and broadcast on their premises.

Mr Hugh Duffy, chief executive of the IMRO, said yesterday that between £1 million and £2 million was being lost annually to Irish artists because of a loophole in the copyright law.

A legal provision, called the Aiken Exemption, means that "bars, shops and restaurants do not pay anything to the music authors for using broadcasts of their music". The IMRO has become the first Irish company to use EU trade barriers regulations to lodge a formal complaint against the US. Mr Duffy said the case had received widespread support in the EU which was losing about £20 million in unpaid royalties a year.

The IMRO has exclusive rights to collect royalties in Ireland on behalf of composers, writers and publishers, but has reciprocal arrangements with similar organisations in other countries.