The European Parliament has voted to allow the copying of digital content, including music and films from the Internet - as long as it is for non-commercial purposes.
The vote was made as the Parliament's Directive on Copyright and Related Rights in an Information Society went through its second reading.
Music-business luminaries attended the vote. Ex-Beatles-producer Sir George Martin said: "The future of authors and musicians will be affected by this directive."
Commission approval It remains to be approved by the European Commission of sovereign government ministers – if this happens, all EU member states will incorporate the laws into their copyright regulations.
The European Parliament wants to shorten the deadline for the directive's entry into force from 24 months, as proposed by the Council, to 18 months - so it coincides with the e-commerce directive
The regulations state that authors, performers, producers and broadcasting organizations will enjoy exclusive rights regarding the reproduction, communication and dissemination of their work.
Incidental copying Certain exceptions will exist - one permits temporary acts of reproduction where these are transient or incidental, and form an integral and essential part of a technological process.
Member States may introduce exceptions or limitations to the principle of authors' rights to take account of the interests of the public, the industry and certain specific categories, such as disabled people.
Exceptions can also be made locally for certain needs, such as reproduction by the press or for scientific research. In some cases these exceptions or limitations will depend on the right-holder receiving "fair compensation".
Unbalanced Critics say the directive fails to strike a balance between rights holders, such as Sir George Martin, and consumers. They argue that so much copyright protection will only stifle the Internet's main attribute - its openess.
"It swings far too far in favour of copyright holders," said Thomas Vinje, a partner at US law firm Morrison & Foerster.
The shift in favour of the rights holder will have negative consequences for the Internet, critics claim. Vinje said: "With this directive, we are moving from an open model of the Internet to a publishers' model. It will allow the largest rights holders to gain greater control over the digital dissemination of material."
Inadequate protection The rules do permit an exemption from copyright law for private copies, so people can record their favourite TV show to watch later, or copy a CD to a cassette tape to listen to in the car. But Vinje warns: "The directive does not adequately limit rights holders from developing technological ways that would render the exemption for private copying obsolete".
Consumers-rights champion Jim Murray said: "The directive gives the big companies that own the rights the opportunity to limit consumers' freedom to make private copies for free. The likely effect of it is that, in future, consumers will have to pay a small charge for making a copy of a CD or a film."
On Monday, a US appeals court ruled that Napster can be held liable for enabling copyright-protected recordings to be swapped over the Internet.
Vinje isn't calling for Napster's practises to be legalized. He said: "I am a strong supporter of copyright protection. It is essential to creativity." But added that in the Internet age "if you are too protective of copyright, you stifle new creation".
Critics fear the debate at national level will favour the desires of copyright holders, because of the powerful lobbying being done by the recording industry. Vinje said: "A few companies have poured millions into their lobbying effort. They have succeeded in pulling the wool over people's eyes."