Scarlet was told by a Belgian court last year that it must filter out copyright-infringing activity carried out by users of its network. It was ordered to pay a €2,500 fine for every day that it did not comply with the order.
That fine has now reached €750,000 but a Brussels court has said that it deserved more time to implement the filtering technology than the six months it had been given.
The court case was originally brought by Belgian authors' rights group SABAM, which claimed that the ISP bore some responsibility for the unlawful sharing of material over peer to peer (P2P) networks on the internet.
It won a ruling from the court that Scarlet did bear some responsibility, and that it should use technical filters to weed out infringing traffic on penalty of a daily fine.
Scarlet had tried to prove that the filtering of traffic was technically impossible but the court did not accept that argument. It said that the company should not be released entirely from the filtering obligation.
It did say, though, that the six months it had been given to install the technology was too short, and that therefore the fines that have built up to date should not apply. The fines should run from 1 November, it said.
In its decision last year, the court had specified a technology for the company to use, a filtering product called Audible Magic which had been recommended by SABAM.
Scarlet is pursuing a full appeal against the verdict. When launching the appeal its managing director Gert Post said that it would be illegal to comply with the verdict.
"This measure is nothing else than playing Big Brother on the Internet,'' said Post at the time. "If we don't challenge it today, we leave the door open to permanent, and invisible and illegal, checks of personal data."
The company said that Belgian phone tap laws prohibited it from following the court's orders.
The appeal is expected to be heard in Brussels this time next year.
"Scarlet may have won some extra time, but the Sword of Damocles is still hanging over its head," said SABAM in a statement. "If Scarlet fails to comply with the court order to prevent P2P infringements by its users in the lead up to the appeal hearing in October 2009, it could still have to pay penalties amounting to some one million euro."
Editor's Note, 03/11/2008: This story has been updated since it first appeared. A reader pointed out errors in the information we reported and sourced to a translation of a story from a Belgian news outlet. SABAM subsequently released a statement on the issue, which we had previously asked for. We had also asked Scarlet for confirmation of the facts of the case but have received no response. We apologise for any inaccuracies in the original report.