Universal Music, the world’s largest record company, on Friday launched the media industry’s first legal challenge against MySpace, the hugely popular social networking site owned by Rupert Murdoch’s News Corp.

Universal, owned by French media giant Vivendi, said it was suing MySpace for the copyright infringement of the music and music videos of its artists, citing specifically the easy availability of material from rap artist Jay-Z’s as yet unreleased album “Kingdom Come”.

The move follows months of negotiations between MySpace and Universal to try and strike a content deal, which broke down this week. It comes against increasing tensions between traditional media companies and new internet sites that specialise in user-generated content.

“The foundation of MySpace is its so-called user-generated content,” the suit states, adding this is “user-stolen intellectual property of others, and MySpace is a willing partner in that theft”.

MySpace said it was “unfortunate” that Universal had filed this “unnecessary and meritless litigation”. It said the site was in full compliance with the Digital Millenium Copyright Act and it provided users with the tools to share their own work, adding: “We do not induce, encourage or condone copyright violation in any way.”

Internet sites such as MySpace and YouTube have gained millions of users in a matter of months.

Universal has so far taken a more aggresive line than its industry peers when it comes to cracking down on copyright infringement and is already suing Bolt.com and Grouper, two smaller sites that feature user-generated content.

Although other media executives are also concerned about copyright, some have questioned Universal’s approach, arguing that the industry could be in court trying to collect legal settlements while its business melts away to rival websites.

Doug Morris, Universal’s chief executive, threatened to sue YouTube, the most popular online video site, shortly before it was acquired by Google for $1.65bn. Universal ultimately cut a deal with YouTube in which it also received equity worth tens of millions of dollars.

Google has indicated it has set aside more than $200m to deal with possible lawsuits and copyright settlements over the next 12 months arising from its acquisition of YouTube.

The lawsuit comes one day after changes at the top of News Corp’s internet division. Ross Levinsohn was on Thursday replaced as president of Fox Interactive Media, which includes MySpace, by Peter Levinsohn, previously in charge of digital strategy at the company’s Fox Entertainment Group.

The issue of copyright infringement has spread beyond the music companies. News Corp itself is one of many big media companies in negotiations with Google about getting compensated for the use of its Fox and other video content on YouTube.

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