A 17-year-old student and a 23-year-old unemployed man allegedly used Trojan viruses to hack into the artists' computers for about 12 months before being discovered, Duisburg chief prosecutor Rolf Haferkamp told The Associated Press.
During that time, they earned more than euro10,000 ($13,240) in illegal sales of tracks acquired from the stars' computers.
The student, an amateur DJ known as "DJ Stolen," also allegedly downloaded a sexually compromising photo of one artist and used it to blackmail her. Haferkamp would not comment on which artist it was.
Haferkamp said the police were informed of the hacking after a fan of Kelly Clarkson alerted her management that unreleased songs of the singer were being sold online.
Unlike in the U.S., German prosecutors first launch formal investigations and then file criminal charges if they find enough evidence. Haferkamp said the investigation should be concluded by January and can lead to criminal charges. The alleged hackers are still living with their parents in western Germany.
Spokesmen for the artists were not immediately available for comment.