UPDATED 06:20 EDT / AUGUST 01 2014

Microsoft ordered to let Feds snoop inside its overseas servers

small__6150104847Microsoft has just lost a key court case that could result in it being forced to give U.S. authorities access to its overseas data centers.

On Thursday, District Judge Loretta Preska of the US District Court for the Southern District of New York, said that a warrant issued by US authorities that seeks access to its servers in Dublin, Ireland, was valid. As a result, Microsoft will have to hand over reams of customer’s emails and other data.

Microsoft claimed that because the data was managed by a foreign subsidiary, the U.S. doesn’t have jurisdiction. Judge Preska didn’t buy that argument. “It is a question of control, not a question of the location of that information,” she ruled.

Microsoft has been one of the staunchest defenders of data privacy in recent years. It’s been particularly vocal in opposing requests for customer data, especially in cases where the request is served with a gag order that prevents it from informing the customers concerned.

Last May, Microsoft successfully challenged a National Security Letter it received from the FBI. Following that decision, the company said it would continue to challenge any future letters it received that demand data from its government and enterprise customers.

In this particular case, the search warrant demanded access to one of its European customer’s emails, ostensibly as part of a drug investigation. It’s not known which agency issued the warrant.

Microsoft claimed that the order wasn’t valid because U.S. warrants cannot reach across the country’s borders. It said the order could set a dangerous precedent.

“If the U.S. government prevails in reaching into other countries’ data centers, other governments are sure to follow,” wrote Microsoft general counsel Brad Smith in the Wall Street Journal. “One already is. Earlier this month the British government passed a law asserting its right to require tech companies to produce emails stored anywhere in the world. This would include emails stored in the U.S. by Americans who have never been to the U.K.”

The judge was more convinced by the Justice Department’s argument that U.S. law already recognizes warrants for some types of data held offshore. This includes the financial records of U.S. banks located overseas. It reasoned that because Microsoft is a U.S. company and controls the data held in Ireland, the same rules should apply.

Microsoft further argued that the emails belong to their customers, just as postal letters do, and should therefore be given more privacy protections than business records. Judge Preska wasn’t persuaded by that argument, either.

Microsoft has already announced its intention to appeal the ruling, and Judge Preska has agreed to suspend her decision until it can be challenged in the Second US Circuit Court of Appeals.

photo credit: cali.org via photopin cc

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