Supreme Court Hears Microsoft Overseas Data Case

On February 27, 2018, the United States Supreme Court heard arguments on whether emails and other customer data stored overseas are subject to U.S. search warrants.  The case before the court involved NEC Member Microsoft and a 2016 ruling by a lower that such warrants can’t be enforced on U.S. providers if the data is stored exclusively on foreign servers.

Microsoft, Google, and other technology companies claim that the Justice Department’s stance that U.S. warrants do apply to data stored overseas can leave them in a difficult position where they must choose between complying with U.S. law enforcement and their obligation to abide by privacy laws in foreign jurisdictions. The Supreme Court’s ruling in the matter could have ramification on American dominance in the $250 billion cloud-computing industry because clients may choose not to U.S. firms if the privacy of their data isn’t protected. The Justice Department claims it isn’t seeking to apply the current U.S. law extraterritorially and noted the government sought disclosure in the U.S. where officials at Microsoft’s headquarters in Redmond, WA, have ready access to files stored abroad.

The law at issue is the Stored Communications Act, passed by Congress more than 30 years ago to provide privacy protections for electronic records. “Only Congress has the authority and tools to rewrite the statute to strike a new, 21st-Century balance between law-enforcement interests, our relations with foreign nations, the privacy of our citizens, and the competitiveness of our technology industry,” Microsoft said in its brief addressing the need for a legislative solution.

Earlier in February, a bipartisan group of lawmakers—including New England’s Senator Sheldon Whitehouse (D-RI)—introduced legislation to tackle the cross-border data issues raised in the case before the Supreme Court.  The New England Council has endorsed this bill, known as the CLOUD Act, and wrote to the New England delegation this week urging them to support it.   Read more in the Wall Street Journal and  the Washington Post.


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