Steps to take in wake of Gmail wiretapping decision

Mobile, Web- and cloud-based companies could also face class-action lawsuits. Here's how to prepare for that possibility.

A recent decision by a federal court in California could expose mobile, Web- and cloud-based businesses to class-action lawsuits for doing nothing more than processing user data. U.S. District Judge Lucy Koh, ruling in a civil lawsuit alleging that Google violated federal and state wiretapping laws when it processed emails through its Gmail service, held that the processing of user data could constitute an illegal interception of electronic communications.

Koh's decision reflects a very narrow interpretation of what it means to process user data in the ordinary course of business. Google, for example, routinely machine-scanned Gmail messages to create user profiles and provide targeted advertising. More troubling for the online community, however, is that when paired with the very broad definition of electronic communications under the federal wiretapping statutes, the decision has the potential to expose a host of current data processing activities to costly class-action litigation. Fortunately, there are certain specific steps that an at-risk business may undertake to mitigate or even avoid this liability.

An expansive application of the federal wiretapping statute

The source of the problem is an anachronistic federal wiretap statute, first enacted in 1968. At that time, the landline telephone system was the predominant communications system, and the voice telephone call was about the only thing that resembled an "electronic communication." In fact, the original wiretap statute did not even refer to electronic communications but rather described only wire and oral communications; the term "electronic communication" was added almost a generation later, in 1986. Today, almost 30 years later, the term "electronic communication" remains largely undefined and is applied (or misapplied) to a wide variety of user-initiated data transfers and related technologies.

In application, the wiretap statute prohibits the interception of oral, wire or electronic communications, subject to various exceptions. A significant exception, and the one at issue in the Gmail litigation, excludes liability for interceptions made in the ordinary course of business. That is, any service through which users send and receive data may process that data within the ordinary course of business without running afoul of the wiretap statute.

In the Gmail litigation, plaintiffs filed a class-action lawsuit alleging that Google illegally intercepted emails sent to and from Gmail users when it processed those messages to develop user profiles and provide targeted advertising within Gmail. Google argued that the processing was exempted from the statute because it was done in the ordinary course of business and that its users consented to the processing.

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