Online social networks 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, Europe's highest court said on Thursday.

The Court of Justice of the European Union (ECJ) was ruling on a case involving two Belgian companies: music royalty collecting society SABAM and online social network Netlog.

Netlog NV runs an online social networking platform where every person who registers acquires a personal space known as a 'profile' which the user can complete himself in the knowledge that that profile becomes available globally. On their profile, users can, inter alia, keep a diary, indicate their hobbies and interests, show who their friends are, display personal photos or publish video clips.

According to SABAM, Netlog's social network enables all users to make use, by means of their profile, of the musical and audio-visual works in SABAM's repertoire, making those works available to the public in such a way that other users of that network can have access to them without SABAM's consent and without Netlog paying it any fee.

On 23 June 2009, SABAM asked a Belgian court in 2009 to order Netlog to stop its users illegally downloading songs from the society's portfolio. SABAM requested inter alia that Netlog be ordered immediately to cease unlawfully making available 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. The Belgian judges sought advice from the Luxembourg court.

"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," the ECJ said in a statement.

"That monitoring would have to have no limitation in time, be directed at all future infringements and be intended to protect not only existing works, but also works that have not yet been created at the time when the system is introduced. Accordingly, such an injunction would result in a serious infringement of Netlog's freedom to conduct its business since it would require Netlog to install a complicated, costly, permanent computer system at its own expense," the ECJ added.

The court also said forcing companies to install a filter to identify, analyze and process users' personal information might infringe their privacy and could result in the blocking of lawful content.

The court added that in the context of measures adopted to protect copyright holders, national authorities and courts must strike a fair balance between the protection of copyright and the protection of the fundamental rights of individuals who are affected by such measures.

Entertainment companies are seeking to oblige internet-based services to police online piracy. Last month, U.S. lawmakers sought to introduce anti-piracy legislation, but backed down after intense lobbying by internet companies and concerns by the White House. The technology companies argued that this would infringe on freedom of speech, internet freedom and be difficult to enforce.

In Europe, protesters rallied on the weekend of February 11 and 12 against ACTA, an international anti-piracy agreement that some European countries have signed.