Microsoft secures major court win with ramifications for global cloud data storage


A federal court has ruled that the US government cannot force Microsoft to hand over data stored in other countries, overturning an original decision from a magistrate judge in 2014 and giving a shot in the arm for cloud security and data sovereignty.

The key asset in the case was data located in Microsoft’s data centre in Dublin, after the US Department of Justice had wanted to access an email server. The previous ruling argued that while Microsoft’s position over giving federal access to servers outside the US was ‘not inconsistent’ with statutory language, it was ‘undermined’ by the structure of the Stored Communications Act (SCA).

At the time of the original ruling, Microsoft deputy general counsel David Howard accepted the timeframes of having to go first through a magistrate judge, before a US district court judge and then eventually to the federal court of appeals. And as the 43-page ruling (viewable here) filed yesterday concludes: “Congress did not intend the SCA’s warrant provisions to apply extraterritorially.

“The SCA warrant in this case may not lawfully be used to compel Microsoft to product to the government the contents of a customer’s email account stored exclusively in Ireland,” it adds. “We therefore reverse the District Court’s denial of Microsoft’s motion to quash; we vacate its order holding Microsoft in civil contempt of court; and we remand this cause to the District Court with instructions to quash the warrant insofar as it demands user content stored outside of the United States.”

Understandably, Microsoft welcomed the decision. “Since the day we filed this case, we’ve underscored our belief that technology needs to advance, but timeless values need to endure,” wrote Brad Smith, Microsoft president and chief legal officer in a statement.

“Privacy and the proper rule of law stand among these timeless values,” Smith added. “We hear from customers around the world that they want the traditional privacy protections they’ve enjoyed for information stored on paper to remain in place as data moves to the cloud. Today’s decision helps ensure this result.”

According to the BBC, the US Department of Justice was “disappointed” by the decision. If the federal department appeals, the case could still yet go to the US Supreme Court. For Microsoft, however, the position was clear going forward. “Today’s decision means it is even more important for Congress and the executive branch to come together and modernise the law,” wrote Smith.

“We’re confident that the technology sector will continue to roll up its sleeves to work with people in government in a constructive way. We hope that today’s decision will bring an impetus for faster government action so that both privacy and law enforcement needs can advance in a manner that respects people’s rights and laws around the world.”

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