WiFi Providers Can Be Forced To Require Passwords On Rightsholder Request, ECJ Rules

The European Court of Justice today ruled that a shop offering WiFi is not liable for copyright infringements on its network but may be forced by rightsholders to require passwords to use the network. [Update: Reactions are being added below]

“In today’s judgment, the Court holds, first of all, that making 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’ under the directive,” an ECJ release said.

The background of the case was: “Tobias Mc Fadden runs a lighting and sound system shop in which he offers access to a Wi-Fi network to the general public free of charge in order to draw the attention of potential customers to his goods and services. In 2010, a musical work was unlawfully offered for downloading via that internet connection.”

The Court confirmed that if three conditions under the E-Commerce Directive are satisfied, “a service provider such as Mr Mc Fadden, who providers access to a communication network, may not be held liable.”

“Consequently,” it said, “the copyright holder is not entitled to claim compensation on the ground that the network was used by third parties to infringe its rights. Since such a claim cannot be successful, the copyright holder is also precluded from claiming the reimbursement of the costs of giving formal notice or court costs incurred in relation to that claim.”

But it noted that the directive “does not preclude the copyright holder from seeking before a national authority or court to have such a service provider ordered to end, or prevent, any infringement of copyright committed by its customers.”

And then the Court held that “an injunction ordering the internet connection to be secured by means of a password is capable of ensuring a balance between, on the one hand, the intellectual property rights of rightholders and, on the other hand, the freedom to conduct a business of access providers and the freedom of information of the network users.”

The Court said such a measure “is capable of deterring network users from infringing intellectual property rights.” For the deterrent to work, users must be required to “reveal their identity to be prevented from acting anonymously before obtaining the required password,” it said.

But the Court noted the directive “expressly rules out the adoption of a measure to monitor information transmitted via a given network. Similarly, a measure consisting in terminating the internet connection completely without considering the adoption of measures less restrictive of the connection provider’s freedom to conduct a business would not be capable of reconciling the abovementioned conflicting rights.”

European Parliament Member Julia Reda (Pirate Party and Vice Chair of the Greens/EFA group) issued a statement criticising the harmful effects of the ruling on WiFi.

Reda’s full statement is below:

“Today’s ruling by the European Court of Justice demonstrates: There can be no digital single market strategy without addressing the problems of our copyright regime. It was only yesterday that Commission president Juncker promised to us that by 2020, all European cities and villages would be supplied with free Wi-Fi[2]. Today, this goal seems more unrealistic than ever.”

“The Court has ruled that courts can issue injunctions upon the request of copyright holders that would require the operator of a free Wi-Fi to restrict network access with a password. That is not just a risk for private persons operating free Wi-Fi, but also for commercial providers or for access points run by local authorities, as foreseen by the European Commission – and it undermines their stated aims.”

“It has been bureaucratic hurdles like this one that have stifled the roll-out of free Wi-Fi and that have recently led to the German government reforming its law with the goal of shielding providers of free Wi-Fi from liability or costs arising from copyright claims.”

“Commission President Junker’s initiative to promote public Wi-Fi is aimed at ‘demographic groups otherwise facing difficulty in accessing connectivity, such as refugees'[3]. The promotional materials clearly illustrate it as Wi-Fi that does not require a password for connectivity[4]. If the free Wi-Fi is supposed to be not just free of charge, but free of barriers, then requiring a password and thus prior registration can’t be an option. This applies especially to refugees, who may be unable to prove their identity.”

“I regret that the European Court of Justice has failed to follow the Advocate General’s opinion[5], who found that the obligation to secure a Wi-Fi with a password would cause a disproportionate damage to society as a whole, as it would lead to less publicly available Wi-Fi access points. The societal benefit of free Wi-Fis by far exceeds the potential risks for copyright holders.”

“The Commission must now live up to its promise. Instead of following Commissioner Oettinger’s lead, who has just announced a copyright reform proposal that will put additional obligations on providers to avoid liability for copyright infringements [6], we have to take the opposite approach. What we need is a secure legal basis for offering free, open Wi-Fi.”

[Update:] Reactions have been coming in:

“Today’s judgement of the European Court of Justice on the McFadden case may impact Juncker’s promises on free public WIFi by 2020: https://radiobruxelleslibera.com/2016/09/15/the-european-court-of-justice-risks-to-restrain-mr-junckers-enthusiasm-on-public-wifi/”

The Pirate Party issued this statement:

“Top Court closes down open password-free WiFi in Europe

In a lawsuit brought by a German Pirate Party politician the
European Court of Justice today ruled that open WiFi networks in
Europe should be closed to stop copyright infringements. In case of
abuse of a public WiFi network for filesharing the operator can be
ordered to password-protect its network and disclose the password to
identified users only, the Court ruled (Case C-484/14, McFadden vs.
Sony Music). Patrick Breyer, the Pirate Party’s data protection expert, is
appalled by this decision:

“This jurisprudence is backward and a technophobic bowing before the
content industry. Following its logic using public telephone booths
and letterboxes should require identification, too. The legislator
needs to fix this.

Contrary to the Court’s assumption compulsory identification will not
dissuade users from file-sharing. It is impossible to trace back a
copyright infringement to a specific WiFi user even if they use a
password. The Court is ignorant of the devastating consequences of
this judgement for Europe’s information infrastructure.

Rights holders are sufficiently protected by mechanisms to have
copyrighted content taken down. Instead of prohibiting open
password-free WiFi the EU should legalise file-sharing and compensate
copyright holders. The Pirate Party fights for a free and anonymous
exchange of ideas and information via the Internet. Today’s ruling is
a complete disaster.”

The Pirate Party promotes open and anonymous WiFi hotspots in order
to facilitate the free exchange of information and knowledge.
McFadden: “The free exchange of information via the Internet cannot
be regarded a source of danger in a democracy but should be
recognised a prerequisite to a democratic state. To us Pirates
unrestricted access to the Internet and to information is a human
right in the 21st century.”

A broad coalition of industry players warned the Court of Justice
about the “grave consequences” of requiring open WiFi networks to be
closed due to copyright enforcement. EFF, OpenRightsGroup, Mozilla
and others point out that open networks aid emergency services and
disaster robustness while enhancing innovation. “Don’t Make Us Lock
Down Our Networks”, says EFF.
https://www.eff.org/files/2015/07/20/closedwifiasanobstacletolegitimatetrade-4.pdf
https://www.eff.org/de/node/86119”

EuroISPA said in a statement:

“Top European Court confirms crucial legal protections for WiFi hotspot operators

The European Court of Justice (CJEU) has today rightly confirmed that public WiFi hotspots do indeed benefit from the liability protections that have been essential to the growth of the European digital economy.

Specifically, in the ‘McFadden’ case the Court has found that operators of free public Wi-Fi cannot be held liable for copyright infringements committed by users of their networks.

This assessment represents a crucial interpretation of the EU E-Commerce Directive, the legal basis that the European legislator has repeatedly identified as being key to the development of Internet technologies in Europe.

Moreover, the Court rightly considers copyright as just one of the many fundamental rights of EU citizens, one that can only be enforced as part of a balanced approach that reflects the importance of competing rights. In particular, it strongly vindicates the right to privacy of communications, by precluding the providers of Internet services from undertaking general surveillance of user activities on their network in search of copyright-infringing content.”