An Irish ISP is implementing a 'three-strikes and you're out' rule to tackle illegal file-sharers.

The move, which involves the ISP warning users suspected of taking part in illegal file-sharing and terminating the connections of persistent offenders, comes as part of a settlement between Eircom and the four major record labels; EMI , Sony BMG, Universal and Warner.

The labels claim the ISP ignored illegal file-sharing activity taking place by its customers and then further encouraged illegal downloaders by advertising broadband packages suitable for downloading 5,000 song per months on file-sharing portal the Pirate Bay.

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Rather than follow the initial request of the record labels and install software that detects copyrighted files being sent over its network, Eircom instead opted to implement three-strikes rule as it thought the software might slow its network and possibly infringe on privacy laws.

"High Court proceedings between four major record companies, EMI, Sony, Universal and Warner and Eircom, which have been at trial for eight days, have been settled on an amicable basis with both sides expressing satisfaction with the outcome," said a joint statement between Eircom and the record companies.

Virgin Media considered a similar scheme last year, when it sent letters to 800 of its customers in a bid to 'educate' them about file-sharing. It has yet to disconnect any of its users.

See also: Gov't: illegal file-sharers won't be disconnected