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Free Wi-Fi? The complex issue of Wi-Fi liability

Let’s be honest, we’ve all gone into a coffee shop or a bar and unashamedly asked for the password to log onto their Wi-Fi network. Indeed, many restaurants now display the password prominently behind the bar, positively expecting customers to log onto the Wi-Fi. It’s seen as good customer service and withholding the password is now deemed socially unacceptable.

At BPE we are no different. We have an internal Wi-Fi network that is available to clients and guests and we are only too happy to provide the password on request. We’re not unique in doing so, many businesses provide Wi-Fi access to staff, customers and visitors alike.

Recently, I returned from a visit to Helsinki, where a network of hotspots across the city makes Wi-Fi as accessible as possible... but is this a potential minefield for liability?

A European Court decision last month may give rise to a need to change this ‘open-access’ policy.

The decision relates to the case of Mr McFadden, who ran a business selling lighting and sound systems in Germany. Mr McFadden had a Wi-Fi network in the shop that he allowed his customers to use, and because Wi-Fi signals don’t recognise property boundaries, the signal extended outside to public areas, effectively allowing anyone on the street to access his network while in range.

At some point, an unknown person illegally downloaded music from the internet via McFadden’s Wi-Fi network, breaching the copyright which was owned by Sony Music.

There is no denying that Sony Music has a claim for copyright infringement against whoever downloaded the music, but unfortunately for Mr McFadden, that person couldn’t be identified. Thanks to the open Wi-Fi network, it could have been anyone. But that didn’t stop Sony Music from pursuing a claim for copyright infringement against Mr McFadden.

In what was perhaps a surprising judgment, the European Court deemed that Mr McFadden was liable for any copyright infringement carried out by users of his Wi-Fi network, even if those users were anonymous.

Thankfully for Mr McFadden, the Court decided that he should not be liable to pay compensation to Sony Music, but the Court did suggest Sony Music could obtain a court order requiring Mr McFadden to password-protect his Wi-Fi network and grant access only to users that had ‘revealed their identity’ through a registration process. The Court did not make a decision on costs, leaving open the possibility that Mr McFadden could have to pay Sony Music’s (quite high) legal costs.

The good news for businesses is that the judgment suggests that they will not be financially liable for copyright infringement carried out over their Wi-Fi networks. The bad news for businesses is that the Court’s decision appears to spell the end to granting unrestricted Wi-Fi access to staff, customers and visitors in an attempt to avoid any likelihood of liability.

The end result is that all businesses are advised to go through the relatively simple process of adding password-protection to their Wi-Fi networks, and requiring potential users to register their details in order to access the password so as to minimise the risk of anonymous infringements... and potentially high legal costs!


These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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