The EU's highest court has moved to prevent record label harassment of individual file-sharers in a decision that protect privacy online.

The European Court of Justice this week declared that ISPs need only disclose the identities of their users in instances of criminal investigation. File sharing is an offence under civil law.

"Community law does not require the member states, in order to ensure the effective protection of copyright, to lay down an obligation to disclose personal data in the context of civil proceedings," the court said.

The court also observed that it is up to each country in Europe to decide how to balance the rights of copyright holders to protect intellectual property and the privacy rights of individual users.

In practice this will allow EU nations to move in different directions on file sharing cases, Iain Connor, a partner at British-based law firm Pinsent Masons, told the Sydney Morning Herald.

"It will not be uniform across the European Union," he said. "A UK court would almost certainly grant a court order" in a similar case," he said.

The ruling - which came as the culmination of an ongoing battele between Spain's Promusicae and Telefonica does confirm that Member States can continue to require disclosure of data in civil proceedings.

In a statement, IFPI chairman and CEO John Kennedy said: “Copyright theft on the internet is the single biggest obstacle to the growth of the music business today.

"The European Court has confirmed the need to have effective tools to tackle piracy. The judgment means that music rights owners can still take actions to enforce their civil rights, and it has sent out a clear signal that Member States have to get the right balance between privacy and enforcement of intellectual property rights and that intellectual property rights can neither be ignored nor neglected.”