On 15 September 2016 (C-484/14), the Court of Justice of the
European Union (CJEU) ruled that the operator of a shop, hotel or
bar that offers free Wi-Fi to the public is not liable for
copyright infringements committed by the network's users.
However, the operator may be required to password-protect its
network in order to prevent—or cease—these
The Facts of the Case
The case concerns a dispute between Tobias Mc Fadden, the owner
of a lighting and sound system shop, and Sony Music Germany. Mc
Fadden's shop offered free Wi-Fi in order to bring in new
customers. In 2010, someone used Mc Fadden's Wi-Fi network to
unlawfully offer a copyright-protected musical for downloading. The
Regional Court of Munich, Germany, took the view that while Mc
Fadden was not the actual infringer, he could be indirectly liable
on the grounds that his Wi-Fi network had not been made
secure. However, the court was not sure whether
the E-Commerce Directive (2000/31/EC) precluded such indirect liability
and referred a series of preliminary questions to the CJEU.
Opinion of the Advocate General
On 16 March 2016, Advocate General Maciej Szpunar
recommended to the CJEU that the operators of free Wi-Fi networks
should not be held liable for copyright infringements committed
over their networks. The opinion confirmed the applicability of the
E-Commerce Directive—and the "mere conduit" defense
in Article 12 of that directive—to free Wi-Fi providers.
While acknowledging that the scope of application of Article 12
largely depended on the potential economic nature of the provision
of the service, the advocate general opined that the safe harbor
provisions should also apply to operators who, as an adjunct to
their principal economic activity, offer a Wi-Fi network that is
accessible to the public free of charge.
He further commented that the safe harbor provisions prevent
courts from making orders against these intermediary service
providers for payment of damages and even for the costs of giving
formal notices. However, the advocate general said this limitation
of liability would not prevent the right holder from seeking an
injunction against the Wi-Fi operator to end the infringement. But
that injunction could not go so far as to require that the operator
terminate or password-protect the internet connection or examine
all communications transmitted through it.
Judgment of the CJEU
In its judgment, the CJEU largely followed the opinion of the
advocate general while disagreeing on two crucial points. The Court
ruled that the operator of a free Wi-Fi network provides an
"information society service" within the meaning of
Article 12(1) of the E-Commerce Directive if he provides access to
the network for the purpose of advertising the goods sold or
services supplied by him. This means that the operator can directly
rely on the liability exemption laid down in Article 12(1).
However, in the eyes of the Court, the operator of the free
Wi-Fi network could be required to protect the network with a
password in order to deter users from infringing copyrights. The
CJEU further ruled that the right holder can claim from the network
operator the costs of giving formal notices and court costs when
such claims are made to obtain injunctive relief to prevent the
operator from allowing the infringement to continue.
Originally published October 12, 2016
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