Microsoft is at risk of being found in contempt of court by refusing to hand over a customer’s emails stored in Ireland. The company had challenged a warrant demanding access to the emails because the data is stored outside of the US, where domestic laws would normally not apply.
Microsoft and the tech community in general are concerned that the application of laws extra-territorially will drive international customers away from US companies. Studies have found that US government data collection could cost businesses billions. Microsoft, along with Verizon and Cisco, has already suffered from the mistrust, according to ZDNet.
Chief Judge Loretta Preska of the US District Court in Manhattan lifted a stay she had previously granted to allow Microsoft to avoid complying with a search warrant. The warrant had been upheld in court, and the company had been granted the stay while it appeals that decision.
The appeal is still alive, but the route it must take is in dispute.
“Microsoft will not be turning over the email and plans to appeal,” a Microsoft spokesperson told Reuters. “Everyone agrees this case can and will proceed to the appeals court. This is simply about finding the appropriate procedure for that to happen.”
Microsoft is fighting the warrant on the grounds that complying with it would violate Irish sovereignty and law, while the government maintains that since the data is under control of an American company, it is entitled to access it, through the Stored Communications Act (SCA). A Presidential review group explicitly recognized problems with the SCA and related legislation earlier this year.
Details of the case the warrant stems from are unreleased, so it is unclear if the email client is an American.
Apple, Cisco, Verizon, and AT&T all submitted briefs supporting Microsoft’s position.
In the context of another debate about US companies fleeing overseas to reduce their corporate tax load, Microsoft’s battle, which may be the first challenge to a warrant seeking overseas data, is important not just to hosts and email providers, but to all US taxpayers, as well as everyone who uses email.