Microsoft warns overreaching warrants could hamstring US cloud storage companies

The Supreme Court today announced it would hear the Justice Department’s complaint against Microsoft concerning the company’s refusal to comply with warrants demanding it turn over emails residing on foreign servers. The implications of this case could determine the future of individual online privacy, and US-based cloud storage companies.

The 2^nd Court of Appeals last year ruled Microsoft had no onus to turn over emails residing on servers located in Dublin. The court declared the Justice Department’s jurisdiction – and a judge’s power to issue a warrant – did not apply to data residing on computer systems outside of the US.

With today’s development the government’s challenge to digital privacy is back on the table. The Justice Department claims that companies like Microsoft are impeding criminal investigations. According to the Wall Street Journal the government provided documents stating:

Under this opinion, hundreds if not thousands of investigations of crimes—ranging from terrorism, to child pornography, to fraud—are being or will be hampered by the government’s inability to obtain electronic evidence.

Microsoft maintains that giving law enforcement carte blanche to issue warrants for data that resides on servers located outside the US is a slope that could lead to a loss of rights for anyone who uses email.

The company’s President and Chief Legal Officer, Brad Smith, said today in a company blog post:

We disagree with the premise of the government’s argument in favor of the warrant that customer email is the property of the email provider, not the customer, which would cause people to lose their rights when they go online

Furthermore, Microsoft also stated there are implications to this case that could cripple US technology companies in the cloud-storage market. According to the company, allowing US law enforcement access to data on foreign servers could put the company in violation of EU privacy laws, a move which “would hamstring U.S. companies’ ability to compete in the multi-billion dollar cloud-computing industry.”

Microsoft has instead proposed law enforcement and the courts should stop relying on a law created in 1986 – far before lawmakers could have predicted the popularity of email and cloud storage.

According to a blog post, the company continues to support legislation before congress now that would create a new set of regulations for law enforcement to work with technology companies.

The hearing will be scheduled for next year with a ruling due by June.

Microsoft did not immediately respond to requests for comment.