London's High Court has ordered UK broadband provider O2 to hand over the personal details, including names and addresses, of 9,124 customers to a pornography company that accused them of illegally downloading their films.
The broadband provider, which has 800,000 customers in the UK, said it had no option but to "co-operate fully" with the judgement handed down.
O2 will now have to match IP addresses of those accused with their customer details.
O2 had been fighting Ben Dover, a pseudonym of Lindsay Honey, who performs in, directs and produces pornography, along with his company Golden Eye International, set up in 2009.
Dover's company demanded the details of those it suspected of using peer-to-peer networks to illegally download the copyrighted content.
It also said it had a draft warning letter ready to go demanding £700 ($1,120) from each and every alleged downloader. If all of those accused paid the settlement fee, it would amount to £6.3 million ($10m).
But Mr. Justice Arnold at the High Court halted the letter, describing it as "capable of causing unnecessary distress, because it could be read as an implicit threat of publicity once proceedings have been commenced."
A similar case occurred when ACS:Law sent out 20,000 letters threatening court action unless a £500 ($800) fine was paid. The UK's legal representatives authority suspended the lawyer behind the scheme, and the law firm ultimately collapsed.
Settlements will now have to be individually negotiated.
If the judge's name sounds familiar, Mr. Justice Arnold is the same judge who presided over a case which all but deemed magnet-link site The Pirate Bay as "illegal".
O2 had been working with Consumer Focus, a citizens advisory group, which was allowed to intervene in a bid to protect the accused.
The BBC notes that O2 will only have to hand over the details of those which Golden Eye Productions said downloaded its films illegally, which could mean a significant lower number than the original 9,124 figure, however.
But now a legal precedence has been set, it could open up a lot more cases where alleged file-sharers could have their details given to music and film bodies for legal action. It means that a greater burden of proof will be put on the broadband customer to show that they were not the alleged file-sharer.
Considering an IP address does not directly correspond to a person, let alone a family or a residence depending on the setup of that connection, it leaves the UK population open to "speculative invoicing" and privately-imposed fines.
While O2 will have to match the IP addresses to broadband account holders' names, the broadband provider has no way of knowing who actually downloaded the files.
Image source: O2.
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