Microsoft has argued that if it is forced by US law to hand over information held on its servers overseas, other countries will follow suit – sparking a “global free for all” that will ultimately erode personal privacy.
“We would go crazy if China did this to us,” Microsoft lawyer Joshua Rosenkrantz told the Second US Circuit Court of Appeals in New York. “This is a matter of national sovereignty.”

Microsoft is appealing against a court judgement that would oblige it to hand over data to the US government on any person or organisation held within its data centres anywhere in the world, provided a valid warrant was presented to, and approved by, a US court.
Microsoft has argued that such extra-territoriality not only threatens personal privacy worldwide, but would also have implications for the nascent cloud computing industry.
The US government’s case is based on the Stored Communications Act, 1986, which Rosenkrantz argued passed in a “pre-CompuServe, pre-AOL world”, and no longer relevant. The US government argues that if data or information can be accessed by a Microsoft employee based in in the US, then its demands cannot be classified as extra-territorial.
Justin Anderson, a lawyer making the case for the US government, said that US law enforcement has the right to obtain electronic information held by American companies with a valid warrant, regardless of where the data is stored. “It’s not a question of ownership,” he said, likening it to seizing account records from a bank. “It’s about custody and control.”
He continued: “”With the benefits of corporate citizenship in the United States come corresponding responsibilities, including the responsibility to comply with a disclosure order issued by a U.S. court. Microsoft should not be heard to complain that doing so might harm its bottom line.”
It is the first time that a US company has challenged a warrant seeking data held abroad, according to Reuters, but the company is supported by its major rivals in the technology industry, including Amazon, Cisco, Hewlett-Packard, eBay, Salesforce, Apple and Google, as well as non-tech businesses, including CNN, Fox News and the Washington Post.
Microsoft has argued that the laws on which the information-grab are based are not fit for purpose, and has instead backed the LEADS Act in the US Congress. This would enable the US government to get access to the data of American citizens stored overseas, under warrant, but not non-Americans. Under the proposed bill, a US company would be able to challenge a warrant if it could argue that it violated the foreign country’s laws.
The Court was hearing the first day of an appeal that had upheld the US government’s right to order Hotmail emails from Microsoft that the company said were held in its data centre in Ireland.

Leave a Reply