IFPI, which represents the recording industry worldwide, has welcomed the move which it claims highlights the illegal business models behind some well-known unlicensed music services.
Italianshare.net and four affiliated websites were originally closed down in November 2011, following action by the Guardia di Finanza (GdF). The authorities then investigated the ways in which the illegal businesses had generated revenue, leading to today's arrest made by officers from the Tax Police Force of Agropoli.
Investigators found that the operator had made an estimated EUR580,000 through a mixture of charging for advertising revenues, seeking donations from users and selling the database containing those users' email and IP addresses to several advertisers.
The operator of the site now faces charges of breaching data privacy, facilitating copyright infringement, forgery, fraud and tax evasion. It is believed he has avoided EUR83,000 in VAT payments and created false invoices totalling an estimated EUR100,000 as part of a tax fraud. He will also face heavy administrative fines for the distribution of copyrighted works estimated at up to EUR32 million in value. Five others have also been charged for multiple offences including tax fraud and counterfeiting.
Frances Moore, chief executive of IFPI, said: "This investigation throws a spotlight onto the illegal business models behind high-profile unlicensed services that are generating revenue and avoiding taxes on a grand scale. I welcome the efforts of the authorities in Italy to tackle this problem and urge governments and law enforcement agencies elsewhere to show similar vigour in curbing illegal activity online."