European Supreme Court advisor: “Strike down Germany’s open-wi-fi-liability laws”

This week, the top advisor to the European Court of Justice advised the Court to rule against Germany’s liability for open wi-fi hotspots. While the case isn’t finished yet, most media reported it as “no liability for open wi-fi”. The case is much, much larger than that.

The European Court of Justice is the highest court in the European Union – a European Supreme Court, if you will – and about six months ahead of every final ruling, an Advocate General – a top advisor to the Court – suggests a suitable angle and approach for a ruling. The Court mostly – but not always – follows the advice of the Advocate General.

Here’s why the open-wireless case in question is important, and much more important than reported:

In most of Europe, it has been long settled that IP addresses do not identify an individual, and so, a subscriber to an Internet connection can’t be civilly liable for copyright monopoly infringements that take place on the connection. Germany circumvented this by making subscribers explicitly liable for activity on unsecured connections, the so-called Störerhaftung.

This has led to a predictable explosion of so-called speculative invoicing in Germany – where shady law firms claiming to represent exclusive-rights-holders are sending threat letters to the subscriber identities of IP addresses they discover in torrent swarms. For some reason, German ISPs are helping the law firms with supplying the subscriber identities. In most of the civilized world, this practice died and was declared fraudulent about ten years ago, but it lives on in Germany according to a German Supreme Court ruling, making Germany lag behind Europe in IT usage patterns by five to ten years.

However, Tobias McFadden, an activist in the German Pirate Party, decided to challenge this doctrine against European Union directives – specifically the mere conduit principle in the e-commerce directive, the messenger immunity of an Internet Service Provider. McFadden argued that his business, providing open wi-fi for customers, should be under the complete and total shield from such liability as an Internet Service Provider. The Advocate General agreed with this, within the narrow scope of a business providing wi-fi for customers. However, there’s no indication it shouldn’t also apply to nonprofits providing such open wi-fi for clients – and in the final step, ordinary households doing the same thing for neighbors. While this will likely require another test case for the Court, it’s not a far step.

This is important because of the open wireless defense.

In Denmark, the Supreme Court ruled the opposite way from Germany, that merely subscribing to an IP address was not enough to make somebody civilly liable (in accordance with the EU directive). In order to establish culpability and civil liability, the copyright industry’s law thugs suddenly needed to obtain the physical computers used for infringement, instead of just waving an IP address in court. The head of the Danish Anti-Piracy Group (APG) commented thus on the case:

“I will not directly say that we can not afford it, but it could be so expensive that it could mean we cannot pursue such matters,” said Johan Schlüter. “We can not accept that we have become completely neutered…”

Still, they were, and remained so. Completely neutered, that is. Last thing you heard anything about Schlüter’s firm, it had been indicted for defrauding rightsholders out of fifteen million US dollars.

The Danish APG, in the form of Schlüter’s law firm, had been using the same kind of speculative invoicing as Germany still does, sending threat letters to Danish people en masse, demanding an insane sum and offering to settle for half if it was paid within ten days. Essentially, it was racketeering through and through. After the open wireless defense was established in the above case – meaning people could point at an open wireless access point and claim that no technical evidence existed that identified their person as the acting part – the Danish racketeering activity just ceased, practically overnight. They knew they could no longer win in court, and everybody else also knew they could no longer win in court. The game was just over.

In other words, media reports have completely missed the importance of this case. It doesn’t mean that the few copyright monopoly infringements that take place over unprotected wi-fi access points cannot be sued, as has been claimed in tech media. Rather, because of how this connects with speculative invoicing and the open wireless defense, it means that no European private copying from home can be sued with speculative invoicing in the future, and that’s quite a bit larger.

It may take another case or two, but it looks like the German copyright industry’s racketeering is coming to a similar swift and very welcome end. These liability laws has meant that IT patterns in Germany has lagged behind the rest of Europe by five to ten years.