Federal Appeals Court: Microsoft Cannot be Forced to Turn Over Data Stored in a Foreign Country
COURT: US GOVERNMENT CAN'T MAKE MICROSOFT REVEAL CLOUD
DATA
BY LARRY NEUMEISTER ASSOCIATED PRESS Jul 14, 2:35 PM EDT
NEW YORK (AP) -- A federal appeals court delivered a
victory to U.S. companies housing customer data overseas, ruling Thursday that
prosecutors cannot force Microsoft to reveal content from a customer's email
account stored in Ireland.
The 2nd U.S. Circuit Court of Appeals in Manhattan
overturned a lower court order finding the company in civil contempt for not
handing over the data.
Microsoft offers storage through its "public
cloud," which places data from over 1 billion customers and over 20
million businesses on servers in over 40 countries, the court noted.
The appeals court said Congress passed the Stored
Communications Act in 1986 to protect user privacy when new technology causes
service providers to store electronic communications for customers. It said
Congress expressed concern then that technology developments could erode the
privacy interest Americans traditionally enjoyed in records and communications.
"Neither explicitly nor implicitly does the statute
envision the application of its warrant provisions overseas," the appeals
court said in a decision written by Judge Susan L. Carney. "We see no
reason to believe that Congress intended to jettison the centuries of law
requiring the issuance and performance of warrants in specified, domestic
locations, or to replace the traditional warrant with a novel instrument of
international application."
The appeals ruling acknowledged that so-called cloud
computing had changed the landscape for storage, letting companies hold
customer data in distant lands.
"Three decades ago, international boundaries were
not so routinely crossed as they are today, when service providers rely on
worldwide networks of hardware to satisfy users' 21st-century demands for
access and speed and their related, evolving expectations of privacy," the
three-judge wrote.
The Justice Department said it was disappointed and
considering its options.
"Lawfully accessing information stored by American
providers outside the United States quickly enough to act on evolving criminal
or national security threats that impact public safety is crucial to fulfilling
our mission to protect citizens and obtain justice for victims of crime,"
Justice Department spokesman Peter Carr said.
Redmond, Washington-based Microsoft Corp. sees the ruling
as a "major victory for the protection of people's privacy rights under
their own laws rather than the reach of foreign governments," Brad Smith,
its president and chief legal officer, said in a statement. He said it also
"helps ensure that the legal protections of the physical world apply in
the digital domain."
He said people around the world want their personal
information protected by the laws of the country in which they live.
"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," he said.
"Today's decision helps ensure this result."
U.S. prosecutors got a warrant for the information in
December 2013, saying they believed the account in a Dublin facility opened in
2010 was being used to further narcotics trafficking.
The court record doesn't address the citizenship and
location of the customer, but Microsoft generally stores data close to users'
reported locations.
Dozens of businesses and news organizations supported
Microsoft's arguments. In one court submission, 29 major U.S. and foreign news
and trade organizations said journalists and publishers worldwide rely on email
and cloud-storage services provided by Microsoft and others to gather, store
and review documents protected by the First Amendment.
U.S. prosecutors had argued Microsoft could retrieve
information stored overseas from its U.S. offices and that "powerful
government interests" override potential negative effects on Microsoft's
business.
"Microsoft should not be heard to complain that
doing so might harm its bottom line," the government argued.
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Associated Press Writer Jim Drinkard in Washington
contributed to this report.
© 2016 The Associated Press. All rights reserved.
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