Spain's two biggest Internet users' associations have accused authors' and publishers' society SGAE of embezzlement, misappropriation of funds and fraudulent use of public subsidies.

The charges are made in a 14-page denunciation presented to Spain's public prosecutor's anti-corruption office.

SGAE has responded by saying it would present a lawsuit against the associations for "false denunciation", and pointed out that the main organisation, the Association of Internauts (AI), was condemned for similar "false" charges in June 2005, and fined €36,000 ($53,300) by a Madrid court.

The new actions are the latest battle in a protracted war between SGAE and Internet user groups over SGAE's insistence on charging so-called digital taxes on blank CDs, DVDs, and other gadgets that can be used to download and/or record music. SGAE says it defends the digital tax to protect its 88,000-plus members from illegal piracy. SGAE is the world's fifth biggest rights collection society, and the biggest in the Spanish-speaking world.

AI and the Association of Internet Users (AUI) say that SGAE heads a network of related companies that are funded by the money that SGAE collects each year in authors' rights. AI and AUI say that some of the companies share the same head offices as SGAE and also the same executives.

By law, SGAE as a collecting society must be a non-profit organization. AI and AUI say that SGAE executives - it names three in the denunciation - have presumably obtained a series of economic benefits through the creation of a network of limited companies which are not directly related to SGAE, and are not subject to non-profit legislation, and which are financed by the money SGAE collects as authors' rights.

Two smaller associations presented the lawsuit together with AI and AUI - the Spanish Association of Small and Medium Computer and New Technology Companies (APEMIT), and the Spanish Association of Venue and Bar Owners Victims of Rights' Taxes (VACHE). SGAE said it would sue all four associations.

In their denunciation, the associations admit the charges are based on a series of media reports, but say the details revealed "are evidence of the existence of a company network [which operates] with clearly lucrative ends (expressly prohibited by law)".

It adds that the media investigations show "the unjust enrichment of SGAE executives as something more than a possibility, and the supposed perpetration of the crimes of embezzlement, and fraud using subsidies." The denunciation refers to "the doubtless evidence of misappropriation of funds in the management of SGAE's economic resources, which on occasion are, or have been, public subsidies."

SGAE's director of legal services, Pablo Hernández, says "SGAE rejects the accusations out of hand. The matter is now in the hands of the public prosecutor, but we are sure the charges will prove to be fruitless, and will be shelved."

Hernández also condemned "the campaign of harassment suffered by SGAE and stimulated by clear and spurious interests with the aim of damaging its activity in defence of the remuneration of authors."