The agony of the recorded-music industry as it fights the "world of free" on the Internet may have become a little more painful in Germany this month, with a court ruling that seems to restrict surveillance of Web users.

Following the example set by the Recording Industry Association of America (RIAA), the German music companies have been tracking down Web users, mostly 15 to 30 years old, who download music in breach of copyright. It reports them to the police.

The industry in Western Europe's most populous nation says it employs 98 sleuths working 24 hours a day. Working from crack computers in a bland Hamburg office building, they collect the downloaders' Internet protocol numbers -- a kind of Internet phone number -- and the times and dates that they were observed.

Is pirating music a serious crime?

To link an IP number to a user, police have to have access to phone-company records.

However that may prove difficult in the light of a March 19 Constitutional Court ruling that police can only obtain telephone company data to uncover serious crimes. Copying music on the Internet may not be considered serious enough.

A debate in the United States on reforming copyright laws to encourage freer exchange has only echoed quietly in Germany. But Eco, the German Internet business association, welcomed the court ruling as a rebuff to music-industry snooping.

Eco promotes new ways of earning money online and has been critical of the music industry. In both Europe and North America, the industry has been accused of failing to adapt to the Internet age and the Web's culture of sharing communities. Critics describe the major labels as dinosaurs, likely to go the same way as telegraph companies: extinct.

Sharing info was "established practice"

The music industry declared confidence that it could continue to pursue the "bootleggers" under legislation that took effect at the start of this year, making it an offense in Germany to download music from sites that are obviously not the legal owners.

Dieter Gorny, chief of the German Music Federation, which funds the hunt, said it was "established practice" for public prosecutors to obtain names and addresses of telephone company customers which matched known IP numbers and monitored times of use.

Gorny insisted that the Constitutional Court had only restricted police use of data about two-way contacts, such as telephone numbers called or the recipients' addresses for e-mails, as well as the duration of phone calls.

This position has yet to be tested in the courts, but this fine distinction may not convince some judges, who may see the Constitutional Court as sheltering file sharers as well.

Property versus privacy rights

In the past year, some media companies have agreed to free up copying, and have abandoned

software known as digital rights management (DRM), which is designed to prevent copying but annoys many customers.

Gorny insisted that protecting the industry's intellectual property rights had nothing to do with any privacy issues, although many of the 30,000 people who brought this week's class-action case said they were concerned about surveillance by big business.

"We support privacy, but privacy should not be used as an invisibility cloak for copyright breaches on the Internet," Gorny said.

The Music Federation argues that its pursuit of downloaders is not conducted under the legislation which was partially stayed this month, requiring data retention by telephone companies for six months as a tool to track down terrorism and other serious crime.

The federation says it relies on section 113 of the German Telecommunications Law, which requires phone companies to release customer names and addresses to police who are investigating a witnessed offense.

Sony forced to reinvent itself

Last year alone, 312 million music tracks were illegally downloaded in Germany, the federation says.

The peak time of the week for bootleggers is Sunday afternoons when young users take time off from their studies to replenish their music collections. Some studies claim that as much as 70 percent of all Internet traffic is file-swapping of video and music tracks.

Sony BMG, one of the biggest labels, says the recordings market has shrunk by 40 percent with the advent of file sharing.

Edgar Berger, head of Sony BMG Germany, advocates banning the downloaders from the Internet. But he said this month that Sony BMG had an alternative plan if it could not stop the bootleggers: reducing its dependence on recordings sales.

His firm is remaking itself as an "entertainment company," with revenues from live performances, merchandising and the like soon to equal income from recordings, he said.