Social networks cannot be forced to install anti-piracy software in a bid to stop members illegally file-sharing.
The ruling was made by the European Court of Justice (ECJ) in regards to a case between Belgian-based social network Netlog and SABAM, a music royalities collection firm also base din Belgium.
"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
"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."
In 2009, SABAM started legal action against Netlog in a bid to stop members of the social network from illegally sharing music and video files over the site. It wanted the social network to be fined €1,000 (£xxxx) for every day it failed to comply. However, Netlog said this effectively meant it had to filter its content and monitor all of its users, and claimed this did not comply with the EU's E-Commerce Directive.
Not only did the ECJ side with Netlog, it also revealed enforcing the social network to install such a monitoring system would infringe the privacy of social networkers and possibly even resulting in lawful content being blocked.
The ECJ's ruling will now be used in all European Courts if its is believed a similar action does comply withy the EU's E-Commerce Directive.
The Open Rights Group told the BBC: "It's good to see courts promoting our rights by swatting away plans to snoop on people's use of social networks".
"It is especially timely because, as seen in agreements like ACTA, policymakers everywhere find it much harder to respect our rights when making intellectual property policy."