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Copyright holders cannot force social networking sites to install filters to prevent illegal file-sharing, the European Court of Justice (ECJ) ruled on Thursday.

"The owner of an online social network cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work," ruled the judge in the case of SABAM versus Netlog.

The court decided that forcing websites to introduce such filters would breach users' right to protection of personal data and the freedom to receive or impart information.

SABAM, a Belgian music management company that represents authors, composers and publishers, took Netlog, an online social networking platform, to court for allowing its users to share music and video clips on its website.

According to SABAM, Netlog's social network enables users to make copyrighted works available to the public without SABAM's consent and without Netlog paying it any fee. In June 2009, SABAM asked the Court of First Instance of Brussels to order Netlog to block the sharing of musical or audio-visual works from SABAM's repertoire and to pay a penalty of €1000 for each day of delay in complying with that order. But Netlog said that such an order would be tantamount to an obligation to monitor all its users, which is prohibited by the E-Commerce Directive.

The Court of First Instance referred the matter to the ECJ, which decided that in order to comply with SABAM's request, Netlog would have to install a filtering system that would examine all of the files stored on its servers by all its users, identify the files likely to contain copyrighted works, determine which of those files are unlawful and then stop them being made available.

Such preventive monitoring could potentially undermine freedom of information, said the court. Moreover, that monitoring would have no time limit, be directed at all future infringements and be intended to protect not only existing works, but also works in the future. This would require Netlog to install a complicated, costly, permanent computer system at its own expense, which said the court, would be an infringement of Netlog's freedom to conduct its business.

European digital rights group EDRI welcomed the ruling: "The European judges have re-emphasized the importance of not overburdening communication tools with restrictive technologies. This is crucial to protect the fundamental rights value of the Internet as well as its economic significance."

In November, SABAM lost a similar case against Internet service providers.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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Copyright Holders Dealt Blow in EU Social Networking Case