* Amazon signs license agreements with top music labels
* New service will scan users' iTunes libraries, among others
By Alistair Barr
July 31 (Reuters) - Amazon.com Inc announced a scan-and-match digital music service on Tuesday, stepping up competition with Apple Inc's iTunes.
The new service will find music files on users' computers, create matching versions of those songs and store them in the cloud, Amazon said.
As part of the new service, Amazon announced licensing agreements with hundreds of music publishers and distributors, including Sony Music Entertainment, EMI Music, Vivendi SA's Universal Music Group, and Warner Music Group. The licenses let Amazon create new versions of customers' digital music files.
The move increases competition with Apple, which introduced a scan-and-match cloud storage offering for music, called iTunes Match, in 2011.
This is the latest example of Amazon encroaching on Apple's turf. Last year, the world's largest Internet retailer began selling its own tablet computer, the Kindle Fire, as a smaller, cheaper alternative to the iPad.
Amazon said on Tuesday that it would match all songs purchased from its online store and store them for free.
The service will also scan and match for free up to 250 music files ripped from physical CDs and those purchased from Apple's iTunes store and other sources, Amazon said.
After 250 songs, Amazon will charge $24.99 a year to match and store up to 250,000 music files purchased or ripped from other sources.
Once in the cloud, customers can listen to the songs through the Kindle Fire and through Amazon apps on devices including the iPhone, iPod Touch, Android tablets and smartphones and on PCs through Web browsers.
Amazon said the service would soon be available through Roku Internet TV boxes and the Sonos home music streaming system.