The company's predecessor, WebListen.com, is still operating despite having been repeatedly sued by European record labels. Puretunes, with a US-based publicity agent, appears to be focusing more heavily on the English-speaking world, however. Each claims to be legal and says it will compensate labels and artists for distribution of their works.

In an apparent bid for publicity -- and in what will certainly spark record companies' ire further -- Puretunes' first affiliate distributor is Grokster, the file-swapping software company that recently won a clean legal bill of health from a Los Angeles federal judge.

Whether it's a good deal for record labels and artists remains to be seen. The company says it has secured licences from two Spanish rights agencies that allow it to distribute music online without explicit authorisation from the record labels and publishers.

Allen Dixon, general counsel of the International Federation of the Phonographic Industry, calls the Spanish companies' claims to have legal licences "complete nonsense". WebListen has lost several rounds in Spanish court so far, and shows no sign of success in any of more than half a dozen lawsuits pending against it, he said.