The European Commission has presented a draft directive to legislate against copyright piracy across member states.

In an attempt to offer certain protections for fair use, the directive punishes copyright infringement for commercial purposes, but leaves home music downloaders untouched - infuriating the entertainment industry.

The proposed directive, meant to harmonize intellectual property right enforcement laws in the 15-nation European Union (EU), aims to strike "a fair balance" between interests of right holders and the opportunities the Internet offers to consumers.

No tougher sanctions are introduced against individuals who download tracks for noncommercial use. Criminal sanctions only apply when copyright infringement is carried out intentionally and for commercial purposes, the Commission said.

Peer-to-peer file-sharing services that encourage copyright infringement and make money from advertising are commercial, according to the Commission. "That is illegal and should be stopped," the Commission said. Examples of file sharing services are Kazaa and Morpheus.

Even though the individual is let off the hook, the Commission uses strong words to condemn piracy and counterfeiting, which is also part of the draft directive. The Commission estimates over 17,000 jobs are lost annually through piracy and counterfeiting in the EU.

Copyright owners slammed the proposals. A statement issued jointly by ten organizations, including the Business Software Alliance (BSA), International Federation of the Phonographic Industry (IFPI) and Motion Picture Association (MPA), called it "inadequate" and "unambitious".

"The proposal creates a two tier system of enforcement where some types of piracy are acceptable and others not," the industry organizations said.