Stelios plays it again in legal row with record firms over internet downloads

Stelios Haji-Ioannou, chairman of easyGroup, will tomorrow meet his legal team to plot an assault against record industry giants, in a case that could open the door to downloading music from the internet legally.

By Clayton Hirst

The entrepreneur is seeking a Court of Appeal hearing after losing an earlier High Court case brought by trade body the British Phonographic Industry with Sony Music, EMI and Universal Music. Mr Haji-Ioannou accuses the record companies of "ripping off the consumer" and operating "inefficient and outdated businesses".

The judge found Mr Haji-Ionnou's easyInternetcafé guilty of infringing copyright by allowing users to download music from the internet on to a CD. If Mr Haji-Ioannou wins the appeal then it would turn the music industry, which has resisted moves to legalise music downloads from the internet, on its head.

Despite having seen off Napster, the music-swapping website, many record companies are struggling with falling sales. There are rumours that EMI and Warner Music are exploring a possible merger as a defensive move. Mr Haji-Ioannou said: "By accident I have found myself holding the banner for legalising music downloading. I strongly believe that the law has not been properly tested."

He believes the 1988 Copyright Act is key. This allows users to legally record such items as television programmes to be watched at convenient times. "This will throw the industry into disarray," said Mr Haji-Ioannou.

In the High Court case, the judge said that this law also applied to the internet so long as it didn't infringe copyright. Commenting afterwards, Bratin Roy, a solicitor at the specialist intellectual property firm Bristows, said: "The judge's further comments could cause a major headache [for the record companies]. Their fight against music swapping and downloading over the internet is far from over."

Mr Haji-Ioannou said if the record industry developed a system of downloading music, consumers would benefit. "Look at the shops that sell CDs for £15 on London's Oxford Street. It is the most expensive real estate in the world, it stores boxes of CDs gathering dust and then there's the cost of the logistics."

Because of his earlier legal defeat, Mr Haji-Ioannou may have to pay up to £1m in damages to the record companies. He was given 56 days to produce data from his computer's hard drives to demonstrate the extent of the downloading from his cafés.