In a turning point in the battle against web piracy, a music-swapping website offering unreleased Eminem and Oasis tracks has been forced to settle a court case with major record companies.
Audiogalaxy, which has about 50 million users, has been home to thousands of recordings that never made it to the shops.
However, it has now been forced to remove all non-copyright tracks and pay a "substantial sum" to resolve the case against it.
It is one of a host of websites to appear following the high-profile collapse of Napster.
The Recording Industry Association of America, a powerful trade group for record labels, and the National Music Publishers Association have reached an out of court settlement with Audiogalaxy.
The site has been forced to filter all its material to make sure no pirated tracks slip through the net.
Audiogalaxy was accused of encouraging and facilitating the online trade in illegal music by "millions of individual, anonymous users".
From now on the site must ensure it has a relevant copyright to list the tracks made available by its users.
"This should serve as a wake-up call to other networks that facilitate unauthorised copying," said Hilary Rosen, the chairman of the RIAA.
"The responsibility for implementing systems that allow for the unauthorised use of copyrighted works rests squarely on the shoulders of the peer-to-peer network."
"The message is clear - there is no place on the internet for services that exploit creators' work without fair compensation," added Edward Murphy, the chief executive of the NMPA.
It was feared sites such as Audiogalaxy would be untouchable because, unlike Napster, they do not hold songs on a central computer but merely allow users to swap files with one another.
The Audiogalaxy agreement is similar to one the RIAA and Napster reached last year, which forced the renegade site offline.
Napster recently filed for bankruptcy and will eventually re-emerge as part of media giant Bertelsmann, which bought the company's assets.
The RIAA is now likely to pursue similar services, such as Kazaa and Morpheus, to force them to become legitimate.
However, analysts warn that once one file sharing site is closed, another will spring up elsewhere on the internet.
They also point to the lack of legal alternatives. MusicNet and PressPlay, the subscription-based ventures set up by record companies, have yet to prove popular with users.
