The music industry is taking legal action against the software company which developed the technology used by Lycos, one of the largest US search engine operators, to find music on the Internet.
As part of its battle against Internet piracy, the International Federation of the Phonographic Industry has initiated criminal proceedings for copyright infringement against the software company, FAST, in Norway, where it is based.
Downloading music on so-called MP3 files - compressed sound files on which music is stored on the Internet - has recently become one of the most popular Internet activities, particularly among teenagers, as an alternative to buying compact discs or listening to the radio.
Lycos launched MP3 Search, a specialist music engine, in early February to enable consumers to locate more than 500,000 MP3 sound files.
Of those 500,000-plus files, "virtually none" were posted on the Internet with the copyright holders' consent, according to Mr Jay Berman, chairman of the IFPI, which represents the world's record companies.
Together with the Recording Industry Association of America, the IFPI is looking into the possibility of taking legal action against Lycos, as well as FAST, in the US.
Mr Berman said: "These unauthorised files include material from virtually every artist you can think of, from the Beatles to Madonna." He added: "We can't tolerate a situation where a search engine as sophisticated as this helps people to access hundreds of thousands of pirated files."
The dispute over MP3 Search highlights a potentially explosive conflict of interest for the diversified media and entertainment groups which dominate the $38 billion (€41.51 billion) global music market.
Lycos is presently being bid for by USA Networks, a television company 46 per cent owned by Seagram, the Canadian concern that also controls Universal Music, the world's biggest music group.
Seagram, which has voting rights on USA Networks' board, paid $11 billion last autumn to expand Universal Music by buying the PolyGram group.
Rising Internet piracy is regarded as the single most important problem facing the international music industry. If USA Networks succeeds in its attempt to control Lycos, Seagram could find itself in the embarrassing situation of being part-owner of a company which poses a serious commercial threat to its expensively-expanded music subsidiary. Seagram declined to comment on the issue.
Internal conflicts of interest could arise for other media groups with music interests, notably Time Warner of the US and Japan's Sony, as they accelerate their diversification into Internet-related activities.
Until now, such conflicts have been limited to wrangles when the hardware manufacturing subsidiaries of conglomerates such as Sony and Philips, PolyGram's former parent company, have threatened to imperil the interests of their music subsidiaries by manufacturing recording devices.
