Consumer Federation of California

A federal appeals court ruled that Google’s interception of messages from private Wi-Fi networks is not exempt from federal wiretap laws, opening the way for a class action suit in the Wi-Spy case to move forward with possible damages amounting to billions of dollars.

A three-judge panel for the U.S. Court of Appeals for Ninth Circuit Court upheld the decision of Judge James Ware, who refused Google’s motion to dismiss the suit when he denied Google’s claim that their activities were exempt from the wiretap law because data transmitted over a Wi-Fi network is a “radio communication” and is “readily accessible to the public.”

Google’s Street View Cars not only were photographing the roads they traveled around the world, but were also collecting “payload” data – including emails, documents, photos, passwords, and other private information — transmitted over Wi-Fi networks as the cars drove by.

“This appeals court decision is a tremendous victory for privacy rights. It means Google can’t suck up private communications from people’s Wi-Fi networks and claim their Wi-Spying was exempt from federal wiretap laws,” said John M. Simpson, Consumer Watchdog’s privacy project director. “Because Google’s Wi-Spy activity was so extensive, the potential damages could amount to billions of dollars.”

Consumer Watchdog attorneys are co-counsel in the class action suit. Judges A. Wallace Tashima, Jay S. Bybee and William H. Stafford heard the appeal. In upholding the lower court, Judge Bybee wrote:

“Wi-Fi transmissions are not ‘readily accessible’ to the ‘general public’ because most of the general public lacks the expertise to intercept and decode payload data transmitted over a Wi-Fi network.  Even if it is commonplace for members of the general public to connect to a neighbor’s unencrypted Wi-Fi network, members of the general public do not typically mistakenly intercept, store, and decode data transmitted by other devices on the network. Consequently, we conclude that Wi-Fi communications are sufficiently inaccessible that they do not constitute an “electronic communication . . . readily accessible to the general public.”

Several countries have fined Google for the Wi-Spy incident. Google was fined $25,000 by the Federal Communication Commission for obstructing its investigation of the scandal, while the Federal Trade Commission declined to act in the case. In March Google agreed to a $7 million settlement with state attorneys general to end their Wi-Spy investigation. When the settlement with the states was announced Consumer Watchdog called for meaningful penalties to change Google’s behavior.

“The company now has a long history of violating users’ privacy, lying about it, apologizing, promising not to do it again, sometimes making a token penalty payment and then moving on to the next violation,” said Simpson in March. “The $7 million penalty is pocket change for Google; it’s clear the Internet giant sees fines like this as just the cost of doing business and not a very big cost at that.”