The world's largest music group is suing, alleging the website lets its users upload copyrighted music and videos without authorization.

In a suit filed on Friday at a U.S. District Court in California, Universal Music Group alleges that the News Corp.-owned social networking website has participated in copyright infringement by formatting videos in a way that lets members play and redistribute the content.

"Businesses that seek to trade off on our content, and the hard work of our artists and songwriters, shouldn't be free to do so without permission and without fairly compensating the content creators," UMG said in a statement e-mailed to CBC News Online.

"The foundation of MySpace is its so-called 'user-generated content,' " says UMG's statement of claim filed in the Central District of California, Western Division court. "However, much of that content is not 'user-generated' at all. Rather, it is the 'user-stolen' intellectual property of others, and MySpace is a willing partner in that theft."

UMG is owned by Vivendi SA. called Universal Music's lawsuit "meritless."

"We have been keeping UMG closely apprised of our industry-leading efforts to protect creators' rights, and it's unfortunate they decided to file this unnecessary and meritless litigation," said in a statement. "We provide users with tools to share their own work — we do not induce, encourage or condone copyright violation in any way."

Earlier on Friday, MySpace announced it had begun testing a new tool that would let copyright holders exert greater control over online video that appears on its users' pages.

The tool, initially being tested with Fox and MLB Advanced Media, will allow copyright holders to flag any user-posted video they allege contains unauthorized content they own. MySpace would then remove all flagged videos and block them from being uploaded again.

Last month, Google paid $1.65 billion US for the popular video file-sharing site YouTube. In a statement earlier this week, the search engine giant revealed that it had set aside more than $200 million US to cover "certain indemnification obligations."

Universal Music was among three major recording companies that reached licensing deals with YouTube.

A U.S. Federal Court judge in September found that StreamCast Networks Inc. of Los Angeles — the makers of Morpheus online file-sharing software — encouraged users to share copyrighted works such as music and movies without authorization.

In Canada, Federal Court Judge Konrad von Finckenstein ruled in 2004 that individuals may share personal copies of music files on the internet after he rejected a recording industry motion to sue them.