NEW YORK (Reuters) - Warner Music Group Corp. sued Imeem Inc., a music-based social networking Web site, on Tuesday for infringing the copyright of its artists including Madonna, Red Hot Chili Peppers and Green Day.
In a suit filed at the U.S. District Court, Central District of California, Warner accused Imeem of building a base of 16 million users by capitalizing on the "illegal use of 'free music.'"
Imeem users can create profiles and connect with each other by uploading MP3 files to create playlists, which they share.
During the upload process, Imeem issues a warning to users not to upload media that they do not own as that can violate artists' copyrights and is against the law.
But Warner's suit said: "Imeem is no innocent infringer. It invites Imeem's millions of users to flock to its website to copy, adapt, distribute and perform unlicensed sound recordings and music videos."
Imeem could not be reached for comment.
Warner, the world's fourth-largest music company, is claiming damages up to $150,000 for each copyrighted work infringed on the site. As part of its evidence, the Warner complaint includes an exhibit that shows thousands of "play counts" for its artists' works on Imeem's site.
According to data from Hitwise, Imeem is now the fourth most popular entertainment-multimedia site in the United States, after Google Inc.'s YouTube, Google Videos and News Corp.'s MySpace Videos.
Imeem, based in Palo Alto, California, is backed by Morgenthaler Ventures and Sequoia Capital, which also backed YouTube before it was bought by Google for $1.65 billion.
Warner Music was the first of the four major record companies to reach an agreement to license its music to YouTube last year, after Universal Music hinted at legal action against the online video sharing site for copyright infringement.
As part of the licensing agreements with YouTube, the major music companies each took a small stake in YouTube before it was bought by Google, sources close to discussions between the music companies and YouTube have said.
Universal Music, the largest music company, sued MySpace last November for infringement of its music on the No. 1 social networking site.
MySpace has started testing a new copyright protection technology to prevent users reposting media to its site, according to media reports earlier this month.