The European Commission has upheld a complaint by the Irish Music Rights Organisation (IMRO) that the US was violating international trade regulations.

IMRO collects and distributes royalties in the Republic on behalf of musicians and composers. According to IMRO, it is the first time an Irish company has lodged a complaint with the European Commission regarding breaches of the World Trade Organisation agreement and the first from the music industry.

IMRO challenged US procedures which allow certain retailers - including restaurants, bars and shops - to perform music publicly without paying royalties to the authors and composers.

The organisation said it has established that US legislation was responsible for the loss of millions of dollars in royalties annually to EU artists. The Commission said the exemptions which the US applies result in losses for EU artists "as it acts as a disincentive to the US performing right organisation to effectively and efficiently license bars, shops, restaurants and others in markets where no exemption exists and leads to a reduction of the efficiency of US organisations when trying to license such venues."

The ruling added that "the prospective revenue a right-holder can expect from the licensing of his work in the US is less than it should be".

The Commission has signalled that action will be commenced against the US, under World Trade Organisation provisions, to resolve the matter. IMRO chief executive Mr Hugh Duffy welcomed the decision, saying it was a victory for thousands of authors and composers all over Europe.