In a major legal setback for Google, a federal appeals court here said on Tuesday that a lawsuit accusing the Internet giant of illegal wiretapping could proceed.

The ruling, which comes at a moment when online privacy is being hotly debated, has its origins in a much-publicized Google initiative, Street View, which tried to map the inhabited world.
In addition to photographs, Street View vehicles secretly collected e-mail, passwords, images and other personal information from unencrypted home computer networks.
The scooping of data brought outrage and investigations in at least a dozen countries when it was first revealed in Germany in 2010. It also prompted a handful of lawsuits by United States citizens who said Google had violated their privacy and was illegally wiretapping them. Those suits were condensed into one case, which was heard by a California court.

Google tried to get the case dismissed, saying the Wi-Fi communications it captured were “readily accessible to the general public” and therefore not a violation of federal wiretapping laws. The lower court rejected that argument, and on Tuesday the Court of Appeals for the Ninth Circuit did too.

“This is an important opinion for privacy rights,” said Kathryn E. Barnett of Lieff Cabraser Heimann & Bernstein, one of the law firms working for the plaintiffs. “It says that when you are in your home, you have a right to privacy in your communications. Someone just can’t drive by and seize them.”

If I remember correctly Eric Schmidt said: "You have to fight for your privacy or you will lose it". It is pretty ironic isn't it?