Internet Industry Association chief executive Peter Coroneos added of the discussion, "It talks about (sanctions for) commercial infringements does that mean one, 10, 20 or 1000 songs?
"It could be that people get sent to jail for being in possession of commercial-scale quantities of copied music."
Although no agreement has been signed, Foreign Minister Stephen Smith has confirmed that the Government is indeed in negotiations.
One critic of the proposal, Choice spokesperson Christopher Zinn noted, "Searching into people's iPods is out of order."
"We don't need to suffer draconian regimes to protect intellectual property. US music labels are keen for their government to sign up other countries to the zero-tolerance stance. It should not be tolerated."