Court Orders Microsoft To Turn Over E-Mail in Dublin Datacenter

In a setback for U.S. cloud providers looking to ensure privacy of data stored in foreign countries, a search warrant ordering Microsoft to turn over e-mail stored in its Dublin, Ireland datacenter was upheld. Judge Loretta Preska of the U.S. District Court for the Southern District of New York upheld the search warrant by a domestic magistrate judge ruling. The identity and locale of the suspect, which is suspected in an illegal drug-related matter, is not known. Microsoft has said it will appeal last week's ruling.

Several tech companies had filed briefs in support of Microsoft's appeal of the warrant during a two-hour hearing held Tuesday, including Apple, AT&T, Cisco and Verizon, along with the Electronic Frontier Foundation, according to published reports. The outcome of this case can potentially set a precedent for all U.S.-based cloud providers storing data abroad.

"Under the Fourth Amendment of the U.S. Constitution, users have a right to keep their e-mail communications private," wrote Microsoft Chief Counsel Brad Smith in April. "We need our government to uphold Constitutional privacy protections and adhere to the privacy rules established by law. We're convinced that the law and the U.S. Constitution are on our side, and we are committed to pursuing this case as far and as long as needed."

In an OpEd piece published in The Wall Street Journal last week prior to the hearing, Smith furthered that view. "Microsoft believes you own e-mails stored in the cloud, and they have the same privacy protection as paper letters sent by mail," he said. "This means, in our view, that the U.S. government can obtain e-mails only subject to the full legal protections of the Constitution's Fourth Amendment. It means, in this case, that the U.S. Government must have a warrant. But under well-established case law, a search warrant cannot reach beyond U.S. shores."

In upholding the warrant Judge Preska argued that's not the point. "It is a question of control, not a question of the location of that information," Preska said, according to a report byThe Guardian. Hanni Fakhoury, staff attorney for the Electronic Frontier, told Computerworld he wasn't surprised by the ruling, saying it ultimately will be decided by the Second Circuit Court of Appeals. "I hope the Second Circuit looks closely at the magistrate's reasoning and realizes that its decision radically rewrote the Stored Communications Act when it interpreted 'warrant' to not capture all of the limitations inherent in a warrant, including extraterritoriality," he said.

The outcome of this case will have significant ramifications on the privacy of data stored in foreign datacenters. But that's not all Microsoft and its supporters have at stake. Should the warrant ultimately be upheld, The Guardian noted, U.S. companies are concerned they could lose billions of dollars in revenues to foreign competitors not subject to seizure by U.S. law enforcement agencies.

Posted by Jeffrey Schwartz on 08/04/2014 at 12:52 PM