Limited liability for free Wi-Fi access

 

In case C-484/14 Tobias McFadden v Sony Music Entertainment Germany GmbH the Court of the European Union (CJEU) was called on by the Regional Court in Munich to clarify whether a professional operating a public and free of charge Wi-Fi network, in the course of business, may be held liable for copyright infringements committed by users of that free network. Last March 16, 2016 Advocate General Szpunar delivered his opinion in this case.

 

The facts. It follows a case concerning Tobias McFadden, who operates a business where he offers a free Wi-Fi network accessible to the public. In 2010, a musical work (the rights were owned by Sony Music) was unlawfully offered for downloading via that Internet connection. Munich’s Regional Court took the view that, although Tobias McFadden was not the actual party responsible for infringing the copyright, he was indirectly liable, since his Wi-Fi network had not been made secure. The Court had some doubts as to whether the E-Commerce Directive precludes such indirect liability and referred some questions to the CJEU.

 

The Directive. Article 12 of the Directive 2003/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) exempts the intermediate provider from civil liability for the transmission of the information if (a) he does not initiate the transfer, (b) he does not select the receiver of the information and (c) he does not select or modify the information contained in the transmission.

Munich Regional Court believes that these three conditions are met, and therefore the liability should be limited, but is also uncertain as to whether Mr Mc Fadden is considered as a provider for the purpose of the Directive.

 

The key issue in this case is whether the Directive provides “mere conduit” protections to providers of open wi-fi hotspots, or whether they should be required password protection in order to enjoy the protection from liability for the copyright infringing actions of their customers.

 

Advocate General’s opinion

Following the E-commerce Directive, the Advocate General made a recommendation to the Court that Mr. Mc Fadden should not be held liable for third party infringement.

He believes that limitation liability also applies to those who, as an adjunct to his principal economic activity, operate free Wi-Fi network with an Internet connection accessible to the public, since Wi-Fi service is operated to “draw the attention of customers” and encourage them to visit his shop or website. Therefore, it is not necessary for that person to present himself to the public as a service provider. Nevertheless, the AG adds that, whilst the Directive limits the liability of a provider of mere conduit services, it does not shield him from injunctions, which have to meet some fairly stringent conditions.

 

On the other hand, the AG argues that business which provide open Wi-Fi to their costumers do not need to require a password to protect their connections, since he considers that the imposition of an obligation to make access to a Wi-Fi network secure, as a means of protecting copyright on the Internet, would not be consistent with the requirement for a fair balance to be struck between, on the one hand, the protection of the intellectual property rights enjoyed by copyright holders, and on the other hand, that of the freedom to conduct business enjoyed by providers of the services in question.

This way, by restricting access, the measure would also entail a restriction on freedom of expression and information. More generally, any general obligation to make access to a Wi-Fi network secure, as means of protecting copyright on the Internet, could be a disadvantage for society as a whole and one that could outweigh the potential benefits for rightholders.

 

However, a final judgment by the Court of Justice of the European Union shall be deliberated at a later date.


Reference:

 

Electronic Commerce

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