Australian ISP iiNet has won a long-running online piracy case brought against it by several movie studios. The Australian Federation Against Copyright Theft (AFACT), representing the studios, failed in its final appeal against a ruling from last year, with the High Court unanimously deciding in iiNet's favor five to zero. AFACT argued that iiNet was ultimately responsible for its subscribers' actions when they downloaded movies illegally, and consequently sued the ISP for copyright infringement. However, the High Court of Australia found that iiNet did not have the power or the responsibility to stop its customers from such violations.

The High Court unanimously dismissed the appeal. The Court observed that iiNet had no direct technical power to prevent its customers from using the BitTorrent system to infringe copyright in the appellants' films. Rather, the extent of iiNet's power to prevent its customers from infringing the appellants' copyright was limited to an indirect power to terminate its contractual relationship with its customers.

The Court went on to say that notices served by AFACT were insufficient evidence for iiNet to reasonably threaten to terminate the customers in question. The unanimous decision means that iiNet has been cleared of charges in the Federal Court, the Full Court and now the High Court of Australia, and AFACT now has no recourse. A successful appeal for AFACT could have meant that Australian ISPs would face the daunting choice of policing their own customers or facing millions of dollars in damage claims.