O2 says it has no option but "co-operate fully" with a High Court judgement ordering it to hand customer details over to a porn company.
Golden Eye International Ltd took action on behalf of 13 adult entertainment companies.
It said it had a list of 9,124 IP addresses which had illegally downloaded some of their films.
It also had a draft warning letter demanding £700 for copyright infringement ready to go.
However, in his 41 page High Court judgement, the Honourable Mr Justice Arnold put the brakes on Golden Eye's demands.
He described the letter as "capable of causing unnecessary distress because it could be read as an implicit threat of publicity once proceedings have been commenced".
Representing O2's customers watchdog Consumer Focus also attacked the claim for £700, describing it as "unsupported and unsupportable".
The Judge agreed and said Golden Eye International Ltd was not justified in sending letters demanding that amount of money.
If all 9,124 customers paid £700 it would amount to £6.3 million.
Instead he ordered that any potential settlement sum should be negotiated with each individual recipient.
In total Mr Justice Arnold rejected claims from 12 of the 13 porn production companies.
That means O2 will now only have to hand over the details of people using IP addresses which Golden Eye said illegally downloaded films from Ben Dover Productions.
Behind titles such as 'Booty Bandit' and 'End Games' it means the final number of O2 customers whose details are likely to be handed over is likely to be significantly fewer than the original 9,124 figure.
Ben Dover Productions and Golden Eye International Ltd have so far not responded to requests for comment.
In a similar speculative invoicing case two years ago ACS Law sent out around 20,000 letters.
They threatened court action against those individuals for copyright infringement unless the recipient paid a £500 fee.
But the cases unravelled as they came to court.
The solicitor behind that action, Andrew Crossley, was later suspended by the Solicitors' Regulation Authority (SRA).