Rejecting Google’s interpretation of the Wiretap Act, the Ninth U.S. Circuit Court of Appeals said the company could be liable for collecting data from unencrypted Wi-Fi networks while gathering information for its Street View project.

Multiple class action suits were filed against the company and ultimately consolidated in California federal court after Google admitted that, in addition to taking pictures for the online Street View, its data gatherers collected payload data such as personal e-mails, usernames, videos, and documents over a three-year period.

A federal court judge denied Google’s motion to dismiss the suits, and earlier this month the Ninth Circuit affirmed.

Google attempted to defeat the claims by relying upon an exemption in the Act at Section 2510(2)(g)(i). It argued that data transmitted over a Wi-Fi network is an “electronic communication” that is “readily accessible to the general public.” Under Section 2510(16)(A), a “radio communication” is by definition “readily accessible to the general public,” so long as it is not scrambled or encrypted.

But the federal appellate panel disagreed.

The ordinary meaning of “radio communication” does not encompass data transmitted over a wireless network, the court said, despite Google’s contention that a radio communication “refers to any information transmitted using radio waves, i.e., the radio frequency portion of the electromagnetic spectrum.” Such an interpretation would include television broadcasts, Bluetooth devices, avalanche beacons, wildlife tracking collars, and garage door openers, the three-judge panel said. “There is no indication that the Wiretap Act carries a buried implication that the phrase ought to be given a broader definition than the one that is commonly understood.”

Radio communications are predominantly auditory broadcasts, which further excludes payload data such as e-mails and images, which are not a broadcast or auditory, the court added. This reading “yields a coherent and consistent Wiretap Act,” while “Google’s overly broad definition does not.”

Wi-Fi transmissions are geographically limited, the panel said, and “fail to travel far beyond the walls of the home or office where the access point is located.” The peak output of a Wi-Fi network reaches approximately 1 watt, the Ninth Circuit explained, while traditional radio broadcasts typically range from 250 to 100,000 watts. In addition, sophisticated hardware and software are required to intercept and decode payload data.

“Most of the general public lacks the expertise to intercept and decode payload data transmitted over a Wi-Fi network,” the panel wrote. Although the necessary technology is available for purchase, this did not make the data “readily available to the general public” as the phrase is ordinarily understood, the court concluded.

Adopting a contrary position would also limit the protections of the Wiretap Act to recipients of communications who decided to secure their wireless networks, the court noted. The sender of an e-mail “is in no position to ensure that the recipient – be it a doctor, lawyer, accountant, priest, or spouse – has taken care to encrypt her own Wi-Fi network. Google, or anyone else, could park outside of the recipient’s home or office with a packet sniffer while she downloaded the attachment and intercept its contents because the sender’s ‘radio communication’ is ‘readily accessible to the general public’ solely by virtue of the fact that the recipient’s Wi-Fi network is not encrypted,” the panel wrote. “Surely Congress did not intend to condone such an intrusive and unwarranted invasion of privacy when it enacted the Wiretap Act ‘to protect against the unauthorized interception of electronic communications.’ ”

To read the decision in Joffe v. Google, click here.

Why it matters: Calling the opinion “disappointing,” a Google spokesperson said the company is considering its legal options. The company settled similar charges brought by 38 state attorneys general in March for $7 million and an agreement to stop collecting payload data. The federal appellate panel’s decision demonstrated the dated nature of the Wiretap Act, which deals with traditional radio services and lacks guidance on modern amenities such as cellular phones and Wi-Fi networks. How the Act would apply to cell phones or a radio station streamed over the Internet remains an open question, the Ninth Circuit noted.