Three Court of Appeal judges have rejected an appeal by UK communication giants BT and TalkTalk over Government measures aimed at stopping illegal file-sharing on the internet.

The two internet service providers (ISPs) argued that the plans went against European Union law, but Lady Justice Arden, Lord Justice Richards and Lord Justice Patten disagreed with their latest legal challenge. They said that the case need not be referred on to the European Court of Justice.

Authors, musicians, film-makers and others working in similar creative fields have claimed that the illegal sharing of files on the internet costs them about £400 million every year.

But the ISPs warned that the Government moves raise fears about the rights to privacy for consumers, and could create unfair costs for companies.

The three appeal judges said an earlier ruling made by High Court judge Mr Justice Kenneth Parker had been "sound".

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