Spain is suffering "a virtual collapse" of its recorded music market because of online piracy, with a drop in overall music sales of more than 65% in the past five years, says the latest report from U.S. culture industry lobby, the International Intellectual Property Association (IIPA).

For the fourth year, the IIPA's Special 301 Report of nations hit by piracy puts Spain close to the top, alongside countries such as Poland, Vietnam and Thailand. It says Spain "is among the worst markets in the world because of a piracy problem that is out of control."

The study calls on the Spanish government to exercise "greater active leadership" to confront what it calls a "deplorable piracy situation." The IIPA recommends that the Obama Administration continue to pressurize Spanish authorities commercially so that they carry out their obligations to ensure that intellectual property is respected.

The Special 301 Report backs the Spanish effort to counter illegal downloads included in proposed legislation within the Sustainable Economy Law, announced Jan. 8, which would open the way to closing Web sites that offer links to unauthorized content.

At the same time, it blames directly the state's district attorney's office for the current legal vacuum, and calls for the annulment of a May 2006 circular that, according to the IIPA, "de-penalizes illegal downloads carried out via P2P networks." This circular says that such downloads are illegal only if a profit motive can be shown.

Meanwhile, culture minister Angeles Gonzalez-Sinde says she hopes the proposed Sustainable Economy Law can reach Parliament for debate swiftly, "so that we can begin as soon as possible the actions contemplated in this measure."

She added that she hopes "2010 will not be a wasted year," since there exists "a real concern in the cultural sector" about illegal downloads, whether they be music or film.

Gonzalez-Sinde also said that the planned anti-piracy legislation was directed exclusively at those "who make money unjustly with the creation of other authors," and not at Spanish Internet users in general.

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