ON the foot of an Irish complaint, the European Commission announced yesterday that it would launch a formal investigation procedure into the exemption of US bars, shops, and restaurants from music copyright. The move is the first stage in the formal lodging of a complaint to the World Trade Organisation.

The cost to Irish musicians of the exemption under the US Copyright Act is about £900,000 a year, claims the Irish Music Rights Organisation (IMRO), the Irish music industry's copyright collection agency, which lodged the complaint.

The complaint has the backing of the copyright agencies of the other 14 member states and already the unofficial backing of all member states. Overall, annual losses to the EU industry are put at £20 million.

Mr Hugh Duffy, of the IMRO, said yesterday it was delighted" by the decision as the US was in "clear breach of its obligations under the Berne Copyright Con vent ion".

Pubs, shops, and restaurants throughout the EU make an annual payment to their national collecting agency related to their size. The provisions of the Berne Convention were copperfastened by the TRIPS agreement in the last GATT round which provides for an adjudication procedure if amicable settlements cannot be reached.

Mr Duffy said it was determined to fight the US on the issue as it represented a very serious loss to creative musicians, but also because the US precedent might be used in third countries as a pretext for not honouring their obligations. IMRO is also concerned that legislative proposals before Congress would exempt many more music users.

The complaint is the first to be laid against the US under TRIPS, although it has been used three times by the US against other countries - Japan, Hong Kong, and China.