The $US24.95 a year service scans users' hard drives for music, including files obtained illegally, and matches them with the authorised tracks in Apple's iTunes library. It then makes a quality iTunes version of the tracks automatically accessible in the iCloud. Apple's iCloud lets users store their files in the online cloud and access them from any device. iTunes Match will initially be only available to US users but it is understood Apple is working on signing licences to enable it to launch in other territories. Michael Speck, who ran the music industry's landmark court case against file sharing network Kazaa and is now working on technologies to reduce piracy, said Apple was "no better than the old p2p pirates". "If you can store all your pirate content you won't need to buy content will you?" said Speck of iTunes Match.

"Let me put it this way: if you can legally park your stolen car in my garage will you rush out and actually pay for your own car?" Speck dubbed the $US25 access fee for iTunes Match a "$25 fee for an alibi" and questioned whether that amount would be split fairly among the copyright owners. "Putting aside that this means a 1000 song catalogue will only cost the pirate 2.5 cents a song, there is no way that Apple could fairly compensate the actual victims and still take its cut," he said. Nick O'Byrne, general manager of the Australian Independent Record Labels Association, also expressed concern, saying in any deal record labels would make just a tiny proportion of the amount they would have if they had sold the tracks legitimately. "Why buy at 'full price' when you can pirate as many songs as you like and absolve yourself of guilt by paying $25 a year?" he said.

But O'Byrne pointed out that, with iTunes Match, record labels would get the chance to "monetise tracks that have already been pirated". "[They are] tracks that they were never going to make money on anyway," he said. The Wall Street Journal reported that Apple will take 30 per cent of the $US25 a year fees and give the rest to the record labels. Copyright law expert and senior lecturer at the University of Queensland Kimberlee Weatherall said that even if people passed their pirated music collections through iCloud they could still be targeted. "You could still be sued for the act of downloading, which involves the making of an unauthorised copy not covered by any licences Apple might have," Weatherall said.

"It makes sense for the labels to license and get a cut from these uses – at present, they get nothing from any unauthorised downloads and uses of unauthorised downloads." But Weatherall was concerned about the long-term competitive implications of services such as iCloud because it further locked people in to a single music service. She was also concerned that by allowing Apple to scan their hard drive for music, people were potentially opening themselves up to legal action from the music industry if Apple was ever forced to hand over data on users. However, it is understood that Apple's service is unable to tell the difference between a legitimate and pirated music track stored on the user's hard drive. Colin Jacobs, chairman of the online users' lobby group Electronic Frontiers Australia, said the service raised interesting questions about whether people could essentially "launder" their pirated music collections by porting them to iCloud.

He fully supports the service but said it was an excellent example of how the traditional concepts of copyright struggle in the digital age. "Innovation in services such as this is crucial and a benefit to productivity and the economy," he said. "We can't derail them by letting the copyright police examine everybody's content and demand to know if the songs once came from a CD or not." A spokesman for the Australian Recording Industry Association said: "ARIA will not be making an official comment on any aspect of the iCloud service at this stage." The iCloud service is similar to music lockers recently launched by Google and Amazon but these are not fully supported by record labels and, unlike Apple's offering, users are required to go through the lengthy process of uploading every song in their libraries.

In addition to iCloud, Apple also unveiled a revamped version of MacOS X, Lion, which will be available in July for $31.99, while the next version of Apple's mobile operating system, iOS 5, could be installed by Australians from "spring". The music industry is in negotiations with internet service providers to come up with a solution to widespread online piracy. Yesterday, Fairfax Media reported that the industry in Australia had backed down on demands that repeat copyright infringers have their internet services disconnected. It is still calling for ISPs to send warning notices to those it identifies as illegal downloaders. Unlike in the US, so far the Australian music industry has been reluctant to sue individuals for illegal file sharing. Loading

A recent survey of 700 Australians by The Project Factory found 40 per cent of respondents admitted to digital piracy while 30 per cent said they never paid for any content downloaded online. Key reasons outlined for pirating content were that it's free (76 per cent), convenient (74 per cent) and that there was no way to get hold of the content legally (70 per cent). This reporter is on Twitter: @ashermoses