Microsoft Must Turn Over Customer Data Stored Overseas: Judge

By Mark Wilson, Esq. on August 01, 2014 | Last updated on March 21, 2019

Think that data stored in overseas data centers are outside the reach of U.S. law? Think again. A U.S. District Court judge in Manhattan has affirmed a magistrate's ruling ordering Microsoft to give overseas-stored data to federal prosecutors.

The ruling -- which Microsoft vows to appeal -- has implications for companies that store their data in other countries. In fact, email providers like Google -- which provide non-Google-branded email services that are hosted by Google -- store files in data centers around the world. Many corporations use Gmail to host their email because it's cheaper than maintaining their own email systems on-site or in-house.

If your company stores files abroad -- and there's a good chance it does -- then those files may very well be within the reach of American law enforcement.

It's Simple... a Little Too Simple

Microsoft's argument, wrote Judge James C. Francis, the magistrate whose ruling was affirmed, "is simple, perhaps deceptively so." Because the jurisdiction of federal courts extends only to the geographical United States, Microsoft reasoned that it should not be required to deliver emails stored abroad to a federal prosecutor as part of a criminal subpoena. "Therefore, Microsoft concludes, to the extent that the warrant here requires acquisition of information from Dublin, it is unauthorized and must be quashed."

Practical Considerations

U.S. District Judge Loretta Preska's ruling came from the bench, so there is no documentation of it at this time; however, Judge Francis focused on the "practical consequences that would flow" from Microsoft's rigid interpretation of American jurisdiction.

Essentially, as long as Microsoft remains in control of the data, it doesn't matter where the ones and zeroes that comprise the data are physically located. In interpreting the Stored Communications Act, Judge Francis concluded that when Congress meant "access" to data, it didn't mean physical access in the sense of being able to enter the data center where the servers storing the data are located. In the digital era, where information can be freely shuttled around the world, "access" means the data themselves, over which Microsoft has control, even if the bytes are physically located somewhere else.

With the U.S. Supreme Court finally grasping that digital information is different from analog, meat-space information, the types of remedies available in the past for analog information are going to be less and less available. For in-house counsel, that means companies can no longer plead extraterritoriality when a subpoena shows up for documents stored on a server in another country.

Although the issue isn't settled yet, Microsoft's argument doesn't quite pass the laugh test. If you can get to a document stored on a foreign server with a few clicks of a button, then why can't the government?

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