Internet, record labels

Is Project Playlist legal? The site allows users to build playlists of music found on other websites (whether they got there legally or not the site claims disinterest) and then streams them to listeners. They pay the relevant performance royalties. In what could be a precedent-setting case, recording companies are alleging that the Project Playlist Web site is guilty of infringement by enabling its own members to give other users access to unlicensed music files hosted by other sites .