The European Court of Justice, the highest court in the European Union, ruled that P2P filters installed by ISPs violate the European Directive on electronic commerce as well as fundamental rights. The full ruling can be accessed here. This comes as a major blow to stingy ISPs who conserve and shed bandwidth in the name of checking peer-to-peer (P2P) traffic, by somehow deeming that all P2P traffic consists of unlawful sharing of copyrighted content and software.

The ruling is part of a case filed by SABAM (Belgium's equivalent of RIAA), which sued ISP Scarlet for not filtering P2P traffic, and in the process, facilitating copyright infringement. A Brussels Lower Court then ordered Scarlet to install a filtering system to monitor the internet traffic of its subscribers. In response Scarlet appealed against the verdict in the European Court of Justice. Scarlet argued that a filtering system would be incompatible with the Directive on electronic commerce and with fundamental rights. The European Court of Justice ruled in agreement with Scarlet.

"In the present case, the injunction requiring the installation of a filtering system involves monitoring, in the interests of copyright holders, all electronic communications made through the network of the internet service provider concerned. That monitoring, moreover, is not limited in time," stated the Court of Justice, "Such an injunction would thus result in a serious infringement of Scarlet's freedom to conduct its business as it would require Scarlet to install a complicated, costly, permanent computer system at its own expense," it continued.

"What is more, the effects of the injunction would not be limited to Scarlet, as the filtering system would also be liable to infringe the fundamental rights of its customers, namely their right to protection of their personal data and their right to receive or impart information, which are rights safeguarded by the Charter of Fundamental Rights of the EU," proceeded the Court.

"It is common ground, first, that the injunction would involve a systematic analysis of all content and the collection and identification of users' IP addresses from which unlawful content on the network is sent. Those addresses are protected personal data," the Court further clarified, stating "Secondly, the injunction could potentially undermine freedom of information since that system might not distinguish adequately between unlawful content and lawful content, with the result that its introduction could lead to the blocking of lawful communications."