The Irish data protection watchdog has ordered the country's largest internet service provider (ISP) to stop using its 'three strikes' system for identifying and warning alleged illegal file-sharers, according to media reports.

The Office of the Data Protection Commissioner in Ireland (ODPC) expressed concern that Eircom's system of using IP addresses to identify alleged copyright infringers invades customers' privacy, the Sunday Times reported, according to a report by thejournal.ie.

Eircom has operated a 'three strikes' system for warning users it suspects of illegal file-sharing that they face being cut off from the internet if they persist with the activity. The system, which Eircom agreed with four major music record companies, had been approved by the Irish Government.

The ODPC would not confirm to Out-Law.com whether the reports were true, but did say its six-month long investigation into Eircom's 'three strikes' system had been "concluded". In June the ODPC launched an investigation into Eircom's system after it sent 'first strike' warning letters to 300 customers wrongly accusing them of illegal file-sharing. At the time Eircom put the wrongful identification of users down to a "software failure caused when the clocks went back last October".

"I can confirm we have concluded our investigation on this matter and have communicated the outcome to Eircom. It has 21 days to respond. Our investigation was commenced on foot of a complaint from an individual who alleged they had received a warning letter about access to copyrighted material in error," the ODPC said in a statement.

Last month the European Court of Justice (ECJ) ruled that although the protection of intellectual property is a fundamental right under EU law, it is not "absolutely protected" and has to be balanced against other fundamental rights. It ruled that a Belgian court had not struck a "fair balance" between the rights of a music royalties collecting society and those of an internet service provider (ISP) and its users when ordering the ISP to filter online traffic in search of copyright infringement.

Under the EU Charter of Fundamental Rights individuals generally have a right to privacy and protection of personal data. The Charter also confers rights on free speech, the freedom to conduct business and states that intellectual property (IP) "shall be protected".

Separate plans to change copyright law in Ireland have been announced by the Irish Government giving rights holders the chance to seek court orders that require ISPs in the country to ban customers' access to pirate content, according to a report in the Irish Times.

In the UK, the Motion Picture Association (MPA) has used provisions under the Copyright, Designs and Patents Act in order to force two major ISPs to cut off customers' access to a copyright infringing website. Under Section 97A of the Act UK courts have the power to grant an injunction against an ISP if it had 'actual knowledge' that someone had used its service to infringe copyright.

The MPA, representing six major film studios including Disney and Fox, won a High Court battle against BT in the summer forcing it to block customers' access to Newzbin2 – a members-only site which collates links to a large amount of illegally-copied material including films, music and computer games, found on Usenet discussion forums. Last week Sky announced that it too had blocked access to Newzbin2 following a court order.

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