The Ninth Circuit Court of Appeals has ruled against Google concerning the company's collection of Wi-Fi information in connection with the development of its Street View service. Background

Google collected data from unencrypted Wi-Fi networks as it drove around taking photos for Street View. That data included the network's name (SSID), the router's MAC address, the signal strength, and whether the network was encrypted. But it also included "payload data" -- emails, usernames, passwords, videos and documents.

Individuals whose data had been collected filed class action lawsuits against Google under the federal Wiretap Act (18 U.S.C. 2511) and various state wiretap statutes. The courts consolidated the matters in the Northern District of California.

Google moved to dismiss the federal Wiretap Act claims. It argued that its conduct did not fall within Wiretap Act liability because the Wi-Fi data was not an "electronic communication" that was "readily accessible to the general public." The district court rejected Google's arguments. Google sought interlocutory review with the Ninth Circuit. On appeal, the court affirmed the denial of the motion to dismiss.

Was the Wi-Fi Payload Data "Readily Accessible"?

The Wiretap Act generally prohibits the unauthorized interception of electronic communications. But the Act provides an exception to liability for interception of electronic communications that are "readily accessible to the general public." 18 U.S.C. § 2511(2)(g)(i).

Google first contended that data transmitted over a Wi-Fi network is an electronic "radio communication" and that under 18 U.S.C. § 2510(16)(A), a communication is "readily accessible to the general public" so long as it is not scrambled or encrypted.

But the court held that the phrase "radio communication" excludes data transmitted over a Wi-Fi network. The Wiretap Act does not define "radio communication," and the ordinary meaning of "radio communication" does not include Wi-Fi data:

Congress does not use “radio” or “radio communication” to reference all of the myriad forms of communication that use the radio spectrum. Rather, it uses “radio” to refer to traditional radio technologies, and then separately describes other modes of communication that are not ordinarily thought of as radio, but that nevertheless use the radio spectrum.

Moreover, the court held, a “radio communication” is a predominantly auditory broadcast, and such a treatment of the term would be consistent with the rest of the Wiretap Act.

Google also argued that even if data transmitted over an unencrypted Wi-Fi network was not a "radio communication," it was still an "electronic communication . . . readily accessible to the general public." The court rejected this argument as well, holding that payload data transmitted over an unencrypted Wi-Fi network is not "readily accessible to the public."

First, Wi-Fi transmissions are not “readily” available because they are geographically limited and fail to travel far beyond the walls of the home or office where the access point is located. Second, the payload data transmitted over unencrypted Wi-Fi networks is only “accessible” with some difficulty, after having the communication with the router authenticated. Unlike traditional radio broadcasts, the court observed, "intercepting and decoding payload data communicated on a Wi-Fi network requires sophisticated hardware and software."

Consequences of the Decision

Apart from keeping plaintiffs' class action claims alive, the decision underscores some important privacy and marketplace considerations. Soon after the Wi-Fi snooping allegations became public, Google issued an apology, and likewise took a notable PR hit. An event of this sort has difficult consequences in an already privacy-skeptical public. Accordingly, the situation provides a valuable lesson to other innovators who would undertake novel approaches to data collection -- one must scrupulously evaluate the risks, both seen and not-so-foreseeable, in these efforts.

Joffe v. Google, Inc., No. 11-17483 (9th Cir., September 10, 2013).