Music Industry Piracy Investigations (MIPI) had alleged that Swiftel's employees and customers created ato host thousands of pirated sound and video recordings.
Michael Kerin, MIPI general manager, would not reveal if a financial arrangement was involved, saying: "Let me put it this way--the music industry would never have settled the case unless it was on terms that suited it."
As part of the settlement terms, announced Friday, Perth-based Swiftel will implement a new process to deal with copyright-infringement notices issued by copyright holders.
"Swiftel regrets that it has not taken enough action to date to stop Internet piracy. We are committed to implementing a new set of industry-leading compliance programs to protect the music industry," Ryan O'Hare, chief executive officer of Swiftel, said in a statement.
The case has been ongoing in Australia's Federal Court since March after MIPI ordered a. The music industry claimed it had evidence that the ISP's employees and customers had infringed on copyright content by using BitTorrent.
The settlement follows the music industry's recent, owners of Kazaa, a similar application to BitTorrent.
Steven Deare of ZDNet Australia reported from Sydney.