On Friday, September 15, the CEO of Universal Music, Doug Morris had told investors that websites, MySpace and YouTube are in violation of copyright law and Universal will be taking some form of action against them if an agreement is not made. Users of these websites are able to upload music videos of artists who may or may not be signed with Universal Music.

According to Yahoo! News, Universal Music’s talks with YouTube has not come to any formal agreements whereas MySpace and Universal Music are making progress.

Warner Music Group Corp. on the other hand has decided to levarage the YouTube technology by creating marketing mediums for their artists including the promotion of Paris Hilton’s newest album. Today, Warner Music Group Corp. and YouTube will be signing a deal that entitles Warner Music to receive royalty fees for the thousands of music videos on YouTube under the Warner Music Group’s label.

While this conflict in interest is taking place between YouTube and Universal, Microsoft is toiling away to release Soapbox, Microsoft’s version of a similar YouTube service. Right now, it is unclear about how Microsoft will prevent users from uploading copyrighted material, but this is definetely a wake-up call to the smaller free video upload sites that exist today.