Record labels win case against Stelios

Stelios Haji-Ioannou, the entrepreneur who leads the fast-growing easyGroup, yesterday suffered a major setback in his legal battle with the music industry when a High Court judge found his easyInternet Café operation guilty of copyright infringement for downloading music.

The summary judgment could result in a sizeable fine for the entrepreneur, whose ventures include the budget airline, easyJet, and the vehicle rental business, easyCar.

The ruling, the latest episode in a bitter 18-month legal dispute, represents one of the most high-profile victories for the record labels in their fight to halt illegal downloads of music which they claim has cost them billions of pounds in sales.

But the dispute seemed far from over last night as Mr Haji-Ioannou said he planned to appeal. The dispute centres around a service offered by easyInternet where customers could download music and get it burned on to a CD for £5. EasyInternet had suspended the service in the summer of 2001, citing commercial reasons.

But the British Phonographic Industry (BPI) – the trade body for the UK record industry – gained access to two of the group's computers in September 2001 and discovered tracks had been downloaded on a "substantial scale".

Civil proceedings for infringement of copyright were launched by the BPI in March last year on behalf of EMI, Sony Universal and two other labels.

During the case easyInternet argued that it should not be held responsible for downloads made by its customers, but the presiding judge, Justice Peter Smith, rejected that defence.

Last night Mr Haji-Ioannou said he was likely to appeal on the grounds of "fair use" laws which he said allowed individuals to download music if it was for their own use.

Separately, the owners of the Kazaa music file-sharing website is suing the movie and record industries in California, claiming that they do not understand the digital age and are monopolising entertainment. It is a counterclaim from Kazaa in response to a copyright-infringement lawsuit brought by several record labels and movie studios.