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Landmark decision on provision of free Wi-Fi

Print publication

10/11/2016

The Court of Justice of the European Union (CJEU) has ruled on whether an individual who operated a Wi-Fi network that was accessible to the public free of charge was an intermediary within the meaning of the E-Commerce Directive [1] (the Directive) (i.e., in the language of the Directive, he was providing an “information society service”) and to what extent the safe harbours contained in Article 12 of the Directive regarding the liability of intermediaries were applicable.

The ruling was made in the context of proceedings between Sony and a Mr Tobias McFadden, who operates a business supplying lighting and sound systems and who owns a Wi-Fi connection that is not password protected and is made available to anyone visiting his shop.  A customer used the connection to illegally upload and share a musical work in breach of Sony’s copyright.  After Sony issued a formal notice, Mr McFadden sought a declaration in which he argued that the liability privilege for access providers set out in the German legislation implementing the Directive freed him from any responsibility regarding the actions of his customers.  The case worked its up way up to the CJEU.

The CJEU ruled that a person who makes a Wi-Fi network available to the general public, free of charge, in order to draw the attention of potential customers to the goods and services of a shop, constitutes an “information society service” for the purposes of the Directive. In order to benefit from the liability privilege pursuant to Article 12, it was necessary that the provider of the service satisfy each of three conditions:

  • they did not initiate the transmission;
  • they did not select the recipient of the transmission; and
  • they did not select nor modify the information contained in the transmission.

Assuming these conditions are met, the access provider is to be deemed an intermediary not liable for compensation or any other costs related to the copyright infringement.

This did not mean, however, that a right holder was unable to seek an injunction from the national courts and demand the termination or the prevention of an infringement of copyright. The Court considered that an injunction could be secured by means of requiring the access provider to password-protect the Wi-Fi connection. This would enable a balance to be struck between the interests of the right holder, the access provider’s freedom to conduct business and the internet user’s freedom to information.  In particular, such a measure would be capable of deterring network users from infringing intellectual property rights provided users were obliged to reveal their identify before going online to prevent them from  sheltering behind anonymity to infringe copyright.

The Court’s attempt to strike a balance between the rights of right holders, on the one hand, and free internet access on the other, in particular the insistence upon the user disclosing their identity as a condition of access, is to be applauded. Operators will also welcome the result although they should note that they may be compelled to password-protect their networks and to seek to obtain the true identify of users of their network.

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[1] Directive 2000/31/EC

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