Manchester City Council spent £3,000 on prosecuting Elavi Dowie, 31, for twice breaching a 19th century law on street trading.
The law allows traders to spend up to 20 minutes on the city's Market Street. But CCTV footage proved that on one occasion Mr Dowie was hawking CDs of his music for 35 minutes, while on another he stood at the same spot for several hours.
Local magistrates found him guilty of two counts of illegal street trading and ordered him to pay fines and costs totalling £330.
Mr Dowie, a dance musician, described the decision to prosecute him as "ridiculous".
He said after the case: "I was basically going up to people in the street and explaining to them about my music. The CD only cost £1 and people were willing to buy it.
"There have never been any complaints. It seems ridiculous when there's a recession to clamp down on someone who is trying to start a business."
Manchester City Council denies that its licensing officers had been heavy-handed.
A spokesman said: "The council enterprise and protects consumers. Mr Dowie's activities were illegal and we have a duty to protect consumers, particularly during the current economic climate.
"Consumers who buy products from illegal street traders are unlikely to get their money back if they make a complaint."
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