A US federal appeals court has rejected Google's request to dismiss a lawsuit, which accused it of violating federal wiretap laws.
The court ruled that Google wrongly collected people's online data from unsecured wi-fi systems after it gathered the information via its Street View cars.
Upholding an earlier ruling by a federal court, Judge Jay Bybee said Wi-Fi transmissions are not readily accessible to the general public because most of the general public lacks the expertise to intercept and decode payload data transmitted over a Wi-Fi network.
"Even if it is commonplace for members of the general public to connect to a neighbor's unencrypted Wi-Fi network, members of the general public do not typically mistakenly intercept, store, and decode data transmitted by other devices on the network," Bybee said.
A Google spokeswoman said: "We are disappointed in the Ninth Circuit's decision and are considering our next steps."
Earlier in 2013, the UK Information Commissioner's Office (ICO) ordered Google to delete all the Wi-Fi data it had captured via its Street View project or the web firm would face court action.
Google agreed to pay $7m in March 2013 to settle with 30 US states over its collection of passwords and other personal data through its Street View mapping cars from home Wi-Fi networks.
Google launched its Street View feature in the US in 2007 to complement its Google Maps service by providing users with street-level photographs.