The UK government has clarified that sharing passwords for streaming services such as Netflix is illegal as it violates copyright laws.

The clarification came from the Intellectual Property Office (IPO) on Tuesday. A spokesperson for the office said that password sharing is both a criminal and civil matter.

"There are a range of provisions in criminal and civil law which may be applicable in the case of password sharing where the intent is to allow a user to access copyright-protected works without payment," they told the BBC.

"These provisions may include breach of contractual terms, fraud or secondary copyright infringement, depending on the circumstances," added the spokesperson. In civil matters, it would depend on the service providers if they want to take action through the courts or not.

The development comes in the backdrop of Netflix trying to figure out ways to stop people from sharing their passwords with their friends, family, and acquaintances. The company has never taken any legal action, but it recently said that it will soon start charging a fee for customers who share their passwords. It has already begun carrying out tests in countries like Costa Rica, Chile, and Peru.

The new policies will allow users to transfer their profile to create a separate, new paid account if they want to stop using their shared membership. Netflix plans to take a "thoughtful approach to monetise account-sharing." However, the company has not revealed how much it is going to charge for these services.

According to an analysis by research firm Digital i, around four million UK Netflix users have been sharing their passwords. Netflix saw a loss of 200,000 subscribers globally at the beginning of the year. It has since been trying to make up for the losses and increase its subscriber base.

It says that out of the 222 million households worldwide that pay for a Netflix account, the passwords are getting shared with more than "100 million additional households."

Smartphone with Netflix logo is placed on a keyboard in this illustration taken April 19, 2022. Photo: Reuters / DADO RUVIC