A sizeable chunk of the Spanish indie label and distribution sector is preparing to take the government to court on charges of negligence, and demand compensation for the damage done to the sector by "massive free downloading" over the past few years.

The labels have drawn up a dossier of information about the damage caused by piracy to the indie sector, and in mid-February sent it to the government. The labels - which all belong to 46-member indie label association UFI or its equivalent in Catalonia, Apecat - gave the government one month to respond.

The labels, including Blanco y Negro Music, Discmedi, PIAS Records Spain, Popstock, K-Industrial Cultural and Picap, have contracted Barcelona legal firm Roca Junyent to take their case to court after mid-March if the government does not respond.

A spokesperson for the culture ministry pointed out that the inter-ministerial commission proposal to block or shut Web sites has been adopted by the culture ministry as part of a future Sustainable Economy Law, which could be debated in parliament within a year.

But the labels say this proposed legislation does not go far enough. "The proposal is insufficient - they could close a Web site one day, and 500 new ones could open the next day in the Ukraine, for example," says Gerardo Carton, director of PIAS Records Spain and spokesman for the 20 or so labels.

"The measure would not resolve the most relevant problem, which is the actual impossibility of us taking civil action against those final users who appropriate music without paying, and systematically violate intellectual property rights," he adds.

"We think the Administration is responsible for our plight," says Carton. "We demand that the government take effective measures imminently to protect the rights and interests of the record industry, as well as the intellectual property rights of the agents that intervene in the creative musical process within Internet."

Among the data the labels have passed on to the government is that small and medium businesses who have signed the dossier have seen their turnover slump 65% in the last three years. As a result, the number of employees in the sector has dropped by 40% since 2004, and it is estimated that the number of stores and other establishments connected to the music industry that have closed in recent years tops 800 in Spain.

Carton and UFI quote Promusicae figures, which show that in 2008 there were some 2 billion illegal music downloads in Spain, compared to just 20 million legal downloads. Carton himself says that this year, PIAS Records Spain will probably release four records by local artists, compared to the usual eight or 10.