Google lost its appeal in federal court yesterday over whether or not its Street View cars invaded people’s privacy by collecting info through their home Wi-Fi systems as it drove through their neighborhoods.

The court said the collection of personal correspondence and online activities was wrong, and violates wiretap laws, despite Google’s protestations that it was exempt because the info transmitted on those networks used a “radio communication” and is already accessible to the public, reports the Associated Press.

“The payload data transmitted over unencrypted Wi-Fi networks that was captured by Google included emails, usernames, passwords, images, and documents,” wrote the U.S. Court of Appeals in San Francisco in a report released Tuesday.

The judges smacked down Google’s arguments, noting that sure, while you could always hop on your neighbor’s Wi-Fi if it wasn’t encrypted, “members of the general public do not typically mistakenly intercept, store, and decode data transmitted by other devices on the network,”

This is apparently the first time an appeals court has ruled it illegal for a company to gather private info over Wi-Fi networks used in people’s homes, and it’s also the first company that’s admitted publicly that it tried to do so.

“This appeals court decision is a tremendous victory for privacy rights. It means Google can’t suck up private communications from people’s Wi-Fi networks and claim their Wi-Spying was exempt from federal wiretap laws,” said John M. Simpson, Consumer Watchdog’s privacy project director. “Because Google’s Wi-Spy activity was so extensive, the potential damages could amount to billions of dollars.”

Meanwhile, Google said that its attorneys are “disappointed in the 9th Circuit’s decision and are considering our next steps.” The company already apologized for the snooping — which took place between 2008 and 2010 — and called it “inadvertent” but not illegal, and promised to stop the practice.

Google previously settled with 38 plaintiff states over the information collection.

Google loses appeal in Street View snooping case [Associated Press]

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