The site, OiNK, is accused by record industry body the International Federation of Phonographic Industries (IFPI) of making albums available weeks before their official release dates. The site was said to have 180,000 paying members.
IFPI said that OiNK was the world's major source of pre-release albums, and that it was responsible for the unauthorised release of 60 albums on to the internet before official release dates.
A 24-year-old man said to be behind the entire operation was arrested in the Middlesbrough area, from where it is alleged he controlled the site. Dutch police were also involved in the operation. They seized servers allegedly belonging to the website last week.
The IFPI said that it had spent two years investigating pre-release piracy sites. It said that the practice of sharing music ahead of release is extremely damaging to the industry, and that it believed it had identified a major culprit in the practice.
"OiNK was central to the illegal distribution of pre-release music online," said Jeremy Banks, Head of the IFPI’s Internet Anti-Piracy Unit. "This was not a case of friends sharing music for pleasure. This was a worldwide network that got hold of music they did not own the rights to and posted it online."
OiNK had a membership system by which only those with music to share could join, and they had to continue to contribute music to the system to maintain their membership. Members also paid donations to the site via credit cards or Paypal.
According to news agency Reuters, the police said that they had made the arrest on suspicion of conspiracy to defraud and copyright infringement.