Businesses that provide free Wi-Fi on the side cannot be forced to make their networks secure, says EU court advisor

Out-Law News | 21 Mar 2016 | 1:17 pm | 2 min. read

Businesses that provide free Wi-Fi services as an additional benefit to customers cannot be forced to make their networks secure to address alleged copyright infringement by users of their networks, an EU court advisor has said.

Maciej Szpunar, advocate general to the Court of Justice of the EU (CJEU), said EU law allows rights holders to obtain court injunctions to force hotels, cafes and other businesses that offer free Wi-Fi connectivity as "an adjunct" to their "principal economic activity" to help stop copyright infringement over their networks.

However, he said that there are limits to what measures can be imposed on operators of such Wi-Fi networks within those court orders.

If the Wi-Fi network operators can only comply with the injunctions by "terminating the internet connection, or password-protecting the internet connection, or examining all communications transmitted through it in order to ascertain whether the copyright-protected work in question is unlawfully transmitted again" then the injunctions do not need to be complied with, advocate general Szpunar said.

This is because EU law precludes the imposition of such measures against businesses that offer free Wi-Fi connectivity to customers as a side benefit to their usual services, he said.

Advocate general Szpunar's opinion was issued in response to questions posed to the CJEU by a court in Germany. The German court asked the CJEU to provide it with guidance on how to interpret laws contained in the EU's E-Commerce Directive which concern third party liability for unlawful activity over electronic communication networks.

The case in Germany concerns a dispute between Sony Music and business owner Tobias McFadden. McFadden provided free public Wi-Fi connectivity alongside the main services he offered customers. He was sued by Sony Music after it claimed McFadden's Wi-Fi network was used to download copyrighted music illegally. McFadden has claimed he is not directly liable for copyright infringement.

According to the newly issued CJEU opinion, the regional court in Munich said it was "minded to reach a finding of indirect liability" against McFadden since he had not made his Wi-Fi network secure, but has asked the CJEU for help in applying the provisions of the E-Commerce Directive to the case.

The opinion of advocate general Szpunar is non-binding on the CJEU, but views of advocate generals often guide CJEU judges when they come to formulate their own judgment in cases referred to them.

The E-Commerce Directive protects service providers from liability for material that they neither create nor monitor but simply store or pass on to users of their service. The Directive says that service providers are generally not responsible for the activity of customers and that member states must not put service providers under any general obligation to police illegal activity on its service.

Service providers are not liable for infringement via their services if they do not have "actual knowledge" or an awareness of the illegal activity. In circumstances where they obtain such knowledge, providing a service provider "acts expeditiously to remove or to disable access to the information" they are not liable for that infringement.

The German government last year outlined plans to update the Telemedia Act to clarify that commercial operators of Wi-Fi hotspots in Germany would not be liable for illegal activities carried out by others over the networks they provide access to "if they have fulfilled certain duties of care".

According to the proposals, Wi-Fi operators would be considered to have taken "reasonable measures to prevent a rights violation by users" if they "have taken appropriate security measures against unauthorised access of the wireless local area network" and "only grant internet access to users who have declared not to commit any rights violations in the context of the use".

In light of advocate general Szpunar’s opinion the German government has asked whether any amendments to the September proposals will be required. Technology law expert Igor Barabash of Pinsent Masons, the law firm behind Out-Law.com, said, though, that he expects the German government to wait until the CJEU issues its formal judgment in the case before finalising its changes to the Telemedia Act.