One of the main weapons in the record industry's arsenal against illegal file-sharing has been struck down by the EU's top court as a breach of fundamental rights.

The European Court of Justice ruled on Thursday (24 November) that internet service providers (ISPs) cannot be be forced to filter internet traffic and block users from trading copyright music or other files, as to do so undermines privacy rights and the ability of people to freely exchange information.

The 'privatisation of law enforcement' has been dealt a blow by the ruling (Photo: Lee Jordan)

In 2007, Sabam, a Belgian collecting society - the outfits that gather royalties on behalf of artists - took Scarlet, an internet provider, to court, seeking to force the company to filter all peer-to-peer traffic and then block any unlawful communications.

A Belgian court approved the injunction, forcing the company to install a filtering system. The ISP appealed, and the case was referred to the EU top court.

"EU law precludes the imposition of an injunction by a national court which requires an internet service provider to install a filtering system with a view to preventing the illegal downloading of files," the court decided.

"[The] injunction could potentially undermine freedom of information since that system might not distinguish adequately between unlawful content and lawful content."

Digital rights advocates are calling the ruling "hugely important" not just for file-sharers in Europe, but around the world.

The principles laid down in just a few lines in one of the paragraphs in the judgment are so strong that it will take a lot for states, which in recent years have increasingly embraced efforts to have ISPs police the internet, to move forward with the strategy they have placed their bets on."

"It pretty much fatally wounds the very strong effort on the part of governments to privatise law enforcement," Joe McNamee, the director of European Digital Rights, told EUobserver.

"States have for some time now backed a model where the music industry goes to the ISP and says 'Look, we can save you a lot of money trying to avoid an injunction if on a voluntary basis, you just block this and this and this'. It turns into a relationship just between the rights holders and the ISP without ever going to court."

If the court had ruled the other way, the responsibility to enforce intellectual property rights would have largely been delegated to internet companies, a development that would have encouraged ISPs across Europe to permanently surveille their networks with filtering.

The EU has also been attempting to export this very 'law-enforcement privatisation' model to other countries - McNamee argued - via the Anti-Counterfeiting Trade Agreement (Acta), a global anti-piracy treaty that aims to set up a global intellectual property framework with its own governing body akin to the World Trade Organisation.

Acta, criticised for being negotiated largely in secret, has long been the bete noire of online civil liberties advocates.

"The ruling really places questions over the legality of Acta. The EU will have to completely rethink their approach or at least be a lot more subtle," he continued. "It they try to enforce injunctions outside Europe, it means that they are trying to push a model that has been struck down inside Europe, which opens them up to legal challenges."

ISPs for their part, who have resisted such injunctions due to the significant cost of installing filtering systems, also cheered the result.

Malcom Hutty, of the European Internet Services Providers Association called the decision "of fundamental importance for the future of the internet."

"Considering the major contribution that the Internet industry can make to the economic recovery, it was indeed not the time to put the innovation of the Internet at risk."

EUobserver was unable to reach Sabam for comment.