MIPI alleged that Swiftel's employees and customers created a BitTorrent file-sharing hub to 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," he told ZDNet Australia.
As part of the settlement terms, Perth-based Swiftel will implement a new process to deal with copyright infringment 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, Swiftel chief executive officer, said in a statement.
The case has been ongoing in the Federal Court since March after MIPI executed a civil search order on Swiftel's premises. The music industry claimed it had evidence that the ISP's employees and customers had infringed copyright by using BitTorrent.
The settlement follows the music industry's recent court victory over Sharman Networks, owners of Kazaa, a similar application to BitTorrent.
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