The Intellectual Property Office (IPO) said on Tuesday the trial broke copyright law.
It is standard in the UK for people who do not live together to share their streaming assistance passwords, despite this typically is against terms of service agreements.
Netflix has never pointed it would take any legal action in such cases.
The IPO has since released the reference to password sharing in its guidance on the government website. However, a spokesperson assured the legal position on password sharing had not changed – and nor has the IPO’s guidance.
It said password sharing was both a prisoner and civil matter.
“There is a range of conditions in criminal and civil law which may be applicable in the case of password sharing where the goal is to allow a user to access copyright-protected works without payment,” it said.
“These conditions may include breach of contractual terms, fraud, or secondary copyright infringement, depending on the circumstances.
“Where these conditions are provided in civil law, it would be up to the service provider to take action through the courts if required.”
There is no proof to suggest any of the major streaming video operators in the UK would do this.
Netflix said it liked to “make it easy” for people borrowing others’ accounts to set up their own, transfer their profile into a new account, to create “sub-accounts” for people to pay extra for family or friends.
It said it would begin moving out these features “more broadly” in early 2023.
The BBC has come to streaming service operators Amazon and Disney for comment.
The scale of the problem
Research firm Digital I estimates around a quarter of UK Netflix subscribers – around four million – are sharing their passwords.
Product director Matt Ross told the BBC that account sharing “presents a major challenge” to Netflix and other streaming services.
“Following on from the addition of the ad-supported tier, there is an opportunity for Netflix to generate significant additional revenue by breaking down on account sharing and converting those who do into subscribers in their own right,” he said.
“The question, however, remains is motivating multiple households who share a premium account to do so?”
In May, then-Culture Secretary Nadine Dorries told she was one of those sharing an account.
“My mum has the key to my account, the kids do. I have Netflix but four other people can use my Netflix account in different parts of the country,” she told the Digital, Culture, Media and Sport Committee.
When Netflix was developing in the UK, the streaming service joked in a tweet about password sharing being commonplace between friends and family.
However, Netflix has never said it will take legal action against such users. Reference to password sharing has also been removed from IPO’s advice on the government website. However the legal status on the matter remains the same, a spokesperson said.
“There is a range of conditions in the hood and civil law which may be applicable in the case of password sharing where the goal is to allow a user to access copyright-protected works without payment,” it said.
“These conditions may include violation of contractual terms, fraud, or secondary copyright infringement, depending on the circumstances. Where these conditions are provided in civil law, it would be up to the service provider to take action through the courts if required.”
Meanwhile, Netflix is planning to make things easier for people who borrow their friends’ accounts. It seeks to “make it easy” for them to set up their own or transfer their profile into a new account. “Sub-accounts” for family or buddies subject to extra payment are also on the cards. The platform is likely to roll out such features by early 2023.
According to research firm Digital I, a quarter of UK Netflix subscribers shares their passwords.
During Netflix’s early days in the land, it cryptically encouraged users to share their passwords. However, this led to a decline in its growth. To counter the problem, Netflix came up with different price tiers to enable people to purchase their accounts.