Internet service providers BT and TalkTalk have lost their legal battle to appeal against certain provisions of the Government's proposed Digital Economy Act, paving the way for the entire Act to become law. The Court of Appeal dismissed the claims, ruling that the Act is compatible with European law.
BT and TalkTalk were appealing a judicial review which was conducted in 2011.
Under the proposed legal changes, Internet Service Providers (ISPs) will be required to send out warning letters to customers who engage in illegal file-sharing. The letters will explain the law and will threaten termination of service for those who repeatedly infringe.
The law was driven by lobbying from the creative services industry, which includes film and television production houses as well as musicians and their record labels. They argue that piracy costs their industry somewhere in the region of £400m every year in lost revenue.
Critics argue, however, that much of the material that is pirated would not be purchased if the law was changed, restricting the spread of material in the marketplace.
Lawyers representing TalkTalk and BT had argued that the change in the law would mean a disproportionate increase in the cost of service provision for ISPs, and a rise in price for consumers.
A spokesman for TalkTalk, speaking after the verdict, said: "We are considering our options. We're disappointed that our appeal was unsuccessful though we welcome the additional legal clarity that has been provided for all parties."
"Though we have lost this appeal, we will continue fighting to defend our customers' rights against this ill-judged legislation," they added.
Christine Payne is the general secretary of the actors' union, Equity. She spoke in support of the court's decision, and called for ISPs to 'stop fighting and start obeying' the law.
"Once again the court is on the side of the almost two million workers in the creative industries whose livelihoods are put at risk because creative content is stolen on a daily basis," she said.
However, the legal fight may not be over as some commentators expect TalkTalk and BT to take their appeal to the UK Supreme Court, the highest court of appeal in the land.
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