Why is piracy illegal?

Virtually everyone dealing with music piracy knows that it is illegal, but why it is illegal is not so well understood. The answer lies primarily in the way that copyright laws apply to music (see What is copyright?)

To ensure there are proper incentives for companies to continue investing in the creation, production, promotion and marketing of sound recordings, international treaties [ WIPO, TRIPS ] and national laws grant producers of sound recordings various rights in those recordings. These rights include the exclusive right to commercially copy the recordings and to distribute/import/export those copies. Depending on the country you live in, these rights may be called copyrights, or 'related' or 'neighbouring' rights. These are separate to any rights that may subsist in the music or the lyrics that are being recorded.

It is these rights that enable law enforcement bodies to take criminal action against those who copy and distribute music without the permission of the record companies that invested in producing it. They also allow record producers to take civil actions to recover compensation for damages suffered as a result of music piracy. While there are often other laws or regulations that are broken by music pirates (eg. tax laws, trademark laws), the rights of music producers under copyright or related/neighbouring rights laws are the fundamental basis for the illegality of music piracy.