Record labels and film studios cannot demand that telecoms companies reveal the personal details of people suspected of swapping copyrighted material on the internet, the European Court of Justice ruled yesterday.

The court was asked to decide on the issue after Promusicae, an umbrella group representing the Spanish music and film industry, sued Telefónica, the telecoms group, for refusing to identify customers suspected of swapping copyrighted material.

Promusicae wanted to use the information to bring a lawsuit against individuals it believed to have been distributing music and films on KaZaA, a peer-to-peer internet network that allows users to share films, music and other media.

Telefónica refused, arguing that European law required only that the telecoms group give out private information about its customers in criminal proceedings or in matters relating to public security.

Agreeing with Telefónica, the court said that European law “does not require member states to lay down an obligation to disclose personal data in the context of civil proceedings”.

Quentin Archer, an intellectual property partner at Lovells, said that the decision was “not the best news for rights-holders”. However, the court added that countries in the European Union were free to introduce their own legislation compelling internet groups to reveal customers’ details where there are reasons to suspect breach of copyright.

Today’s ruling addressed whether EU law gave copyright holders an automatic right to demand the information.

In the UK, copyright holders can apply to a court to force an internet service provider to disclose information where piracy is suspected. However, the court must be persuaded to make an order and lawyers said this is far from an automatic right.

The European Commission said this month that it would examine ways of boosting the online music and film market without compromising intellectual property rights.

The Motion Picture Association, which represents American film studios including Universal, Walt Disney and Paramount, claimed in a 2005 study that the US film industry loses $6.1 billion a year to piracy.

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