Is tunesBag a legal service? Long story short: Yes

To make a long story short: Yes, tunesBag is a legal service.
Everytime there's something new about a service in the field of online music I suppose the major labels are calling their law firm for immediate action. So one has to be prepared when starting a project in this area and here are the reasons why I think tunesBag is a totally legal service.

1. Clear Focus on private service
   Although, the community features will be expanded (we have already integrated some facebook services), no music is made available to the public. If you upload music to tunesBag, it will not be stored on a public FTP server where everyone has access.
   
   Moreover, most of the services are strictly private and can only be accessed with the right username / passwort. So clearly the user has to take the responsibility of what he is doing - image the example of someone writing a construction manual for a bomb in Word - would you blame Microsoft?
   
   
2. "Privatkopie" allows sharing of data
   Under the Austrian jurisdiction, there exists a right for the so called "Privatkopie" (§ 42 UrhG, see our FAQ). It's totally legal to share data with friends when it is not done for commercial reasons and without doing that in order to make it available to the public.
   
   § 42 UrhG. (1) Jedermann darf von einem Werk einzelne Vervielfältigungsstücke auf Papier oder einem ähnlichen Träger zum eigenen Gebrauch herstellen.
   (4) Jede natürliche Person darf von einem Werk einzelne Vervielfältigungsstücke auf anderen als den in Abs. 1 genannten Trägern zum privaten Gebrauch und weder für unmittelbare noch mittelbare kommerzielle Zwecke herstellen.
   (5) Eine Vervielfältigung zum eigenen oder privaten Gebrauch liegt vorbehaltlich der Abs. 6 und 7 nicht vor, wenn sie zu dem Zweck vorgenommen wird, das Werk mit Hilfe des Vervielfältigungsstückes der Öffentlichkeit zugänglich zu machen. Zum eigenen oder privaten Gebrauch hergestellte Vervielfältigungsstücke dürfen nicht dazu verwendet werden, das Werk damit der Öffentlichkeit zugänglich zu machen.
   
   
3. No unlimited sharing
   The number of persons who can access your library is not unlimited. This limitation is made in order to guarantee that the term "public" access does not apply to your activities on tunesBag.
   
   
4. No intention to violate laws
   tunesBag is not made with the intention to bypass or violate a law - the user is responsible for the data he uploads and all tunesBag is doing offering some technical basis. The very same principle applies to every website with user generated content. If we get notified of violations by the responsible government agencies we of course have to react according to the law (e.g. according to §17 (1) ECG, no general liabilty for links or content on other websites).
   
   
5. Streaming yes, Downloads no
   You can only listen to the music of your friends but not download it. This restriction is made despite of the fact that under the term of "Privatkopie" this could be totally legal according to my understanding.
   
   
6. Promotion of free music
   We already have started some features which aim directly to the promotion of free music - these data (mainly licenced under the Creative Commons licence) is much easier to handle as other types of music.

I hope these statements have made some things clearer to people interested in law.