GROSHEIDE have been protected by copyright law ever since the establishment of modern intellectual property bw at the end of the 19th century and the national and international recognition thereof(in the Great Conventions of 1883 and 1886) Copyright law grants the rightowners in musical works, e ither fixed in print or on a ound recording, as well as their perfomances, prerogatives with regard to reproduction, distribution and communication to the public. Similar prerogatives are today granted to the performers of musical works(Rome Convention 1961). Such prerogatives nevertheless have to be exercised with due regard to the exceptions and limitations set by the aw in view of the interests of society at large. Obv iously the indicated prerogatives were developed in a historic perspective for the off-line world successively for sheet music, gramophone records, and radio transmissions. As long as the developments in this respect concemed modernization and adaptation of existing ana bg technologies(e.g long-playing sound recordings, television), some stretching of the established legal framework sufficed in order to cope with those new developments However, things changed considera bly from the moment when computer technology began to spread, particularly from the moment that the Internet became the main vehicle for on-line music distribution. Indeed. distribution of music on-line is one of those new transactions which can be executed entirely by electronic means through the Internet. Not surprisingly, such distribution has increasingly become a major part of so-called electronic commerce. Understandably, music distribution on- line is of only ones who have an interest in this distribution. This equally applies to the new dotcoms that prov ide intemediary distribution services, to consumers and not least to musicians and performers. However, the interests of those involved do not coincide in every respect. As a consequence, legislators and courts both on an international and national level are challenged to balance the interests at stake by providing, on the one hand, sufficient legal protection to copyright owners of music for the legitimate exploitation of their vulnerable digital products, while on the other hand ensuring that particularly consumers, i.e. society at large, haveapproprate rules to access these products. It may be said that until recently the music industry has failed to serve the need for tailor-made music distribution on-line at reasona ble prices This factor, together with an ideologically inspired view of Internet music distribution that confronts the monopolistic approach of the big producers, has resulted in the advent of a host of alternative dotcom music distributors It is notably this development in connection with the introduction of a new technology known as MP3 and the way in which it changed the on-line distribution of musical works that shook the foundations upon which the record industry had traditionally controlled the distribution of music. MP3 technology and related technologies are altering the way in which composers and performers release the work, the way record companies sell it, and the way the public consumes it. Legally speaking, the MP3 technology has given rise to serious controversy with regard to the application of the traditional legal framework to the distribution and consumption of musical works in the internet environment. On the one side. the esta blished industry is arguing that many MP3 distribution sites are purely illegal, the music being uploaded for unlimited use, and distributed by intemedaries and downloaded by consumers who do not pay the royalties due for such use. Allowing MPGROSHEIDE 218 have been protected by copyright law ever since the establishment of modern intellectual property law at the end of the 19th century and the national and international recognition thereof(in the Great Conventions of 1883 and 1886). Copyright law grants the rightowners in musical works, either fixed in print or on a sound recording, as well as their performances, prerogatives with regard to reproduction, distribution and communication to the public. Similar prerogatives are today granted to the performers of musical works (Rome Convention 1961). Such prerogatives nevertheless have to be exercised with due regard to the exceptions and limitations set by the law in view of the interests of society at large. Obviously the indicated prerogatives were developed in a historic perspective for the off-line world successively for sheet music, gramophone records, and radio transmissions. As long as the developments in this respect concerned modernization and adaptation of existing analog technologies (e.g. long-playing sound recordings, television), some ‘stretching’ of the established legal framework sufficed in order to cope with those new developments. However, things changed considerably from the moment when computer technology began to spread, particularly from the moment that the Internet became the main vehicle for on-line music distribution. Indeed, distribution of music on-line is one of those new transactions which can be executed entirely by electronic means through the Internet. Not surprisingly, such distribution has increasingly become a major part of so-called electronic commerce. Understandably, music distribution on-line is of vital interest to the established music industry. Yet the record companies are not the only ones who have an interest in this distribution. This equally applies to the new dotcoms that provide intermediary distribution services, to consumers and not least to musicians and performers. However, the interests of those involved do not coincide in every respect. As a consequence, legislators and courts both on an international and national level are challenged to balance the interests at stake by providing, on the one hand, sufficient legal protection to copyright owners of music for the legitimate exploitation of their vulnerable digital products, while on the other hand ensuring that particularly consumers, i.e. society at large, have appropriate rules to access these products. It may be said that until recently the music industry has failed to serve the need for tailor-made music distribution on-line at reasonable prices. This factor, together with an ideologically inspired view of Internet music distribution that confronts the monopolistic approach of the big producers, has resulted in the advent of a host of alternative dotcom music distributors. It is notably this development in connection with the introduction of a new technology known as MP3 and the way in which it changed the on-line distribution of musical works that shook the foundations upon which the record industry had traditionally controlled the distribution of music. MP3 technology and related technologies are altering the way in which composers and performers release their work, the way record companies sell it, and the way the public consumes it. Legally speaking, the MP3 technology has given rise to serious controversy with regard to the application of the traditional legal framework to the distribution and consumption of musical works in the Internet environment. On the one side, the established industry is arguing that many MP3 distribution sites are purely illegal, the music being uploaded for unlimited use, and distributed by intermediaries and downloaded by consumers who do not pay the royalties due for such use. Allowing MP3