Universal, owned by French media conglomerate Vivendi, claims that Myspace has looked the other way as users unlawfully uploaded copyright music videos.
In a copy of court documents filed Friday in U.S. District Court in Los Angeles, Universal also accuses MySpace of aiding copyright infringement by reformatting clips so users can transfer them to friends or post them to other sites.
"Defendants have made infringement free and easy," Universal's attorneys wrote in the filing, a copy of which was obtained by CNET News.com. "(MySpace) has turned MySpace Videos into a vast virtual warehouse for pirated copies of music videos and songs."
Universal's announcement came hours after MySpace had launched a new copyright protection tool. The companies have also negotiated for weeks over the issue of copyright, according to Peter Lofrumento, a Universal spokesman.
"MySpace provides an extraordinary promotion platform for artists--from major labels to independent acts--while respecting their copyrights," a MySpace spokesperson said in a statement. "We have been keeping UMG closely apprised of our industry-leading efforts to protect creators' rights, and it's unfortunate they decided to file this unnecessary...litigation."
MySpace, which is owned by News Corp., has moved in recent months to guard against copyright violations. Last month, it licensed "fingerprinting technology" from to help prevent unauthorized music from landing on the site. The filtering system, which launched on Friday, is designed to automate the removal of unauthorized works from the site once they have been flagged by copyright holders.
Apparently, this wasn't enough to satisfy Universal.
"We didn't try to sue (MySpace) right off the cuff," Lofrumento said. "We've been trying to negotiate a deal like the one we have with YouTube. Filing is always a last resort."
Negotiations between Universal and MySpace ground to a halt a week ago, according to a source close to the talks, who added that prior to that time, Universal executives became outraged when they found an unreleased video from rapper Jay-Z on the social-networking site.
Universal notified News Corp. lawyers on Thursday that the lawsuit was coming, said the source, adding that News Corp. tried one last time to persuade Universal to hold off on filing the suit, but Universal's representatives refused.
A preemptive strike?
Universal executives, said the source, think MySpace tried to preempt news of the lawsuit by announcing the release of technology to prevent copyright infringement.
"Do you think it was a coincidence that MySpace launched that filtering technology, one that hasn't been released yet, on the same day Universal filed their suit?" the source asked. "I don't think so."
This is a crucial time for some of the Web's most heralded companies. Sites such as MySpace and YouTube have attracted massive audiences by allowing them to post homemade videos to their sites and share them online.
But allowing them to post clips unchecked has let some users lift clips from TV shows, movies and music videos without permission from the copyright holder.
Last July, Los Angeles-based newsman Bob Turafter seeing his footage of the 1992 Los Angeles riots on the site. Universal has also taken video-sharing companies Bolt.com and to court over copyright.
Google, which recently acquired YouTube for $1.65 billion, has set aside $200 million in stock to coverover copyright, according to a report this week by the Associated Press.
At the same time, social-networking and video-sharing companies are scurrying to eitherto weed out copyright works or cut content-sharing deals with entertainment companies.
In October, YouTube announced that Universal agreed to offer access to thousands of videos from the company's archives to YouTube users. The partnership also allowed YouTube users to integrate into their videos songs from Universal's music catalog.
YouTube also struck a similar deal with Warner Music Group.