Microsoft has won a landmark ruling in a long-running court battle with the US Department of Justice concerning an email residing on a Microsoft server located in Ireland which is understood to be related to the Silk Road underground market site.
The US authorities demanded in 2013 that Microsoft, as a US company, must disclose the contents of the email, a demand that was supported by a New York court the following year. Microsoft appealed fearing a backlash from its cloud customers, and the two sides have argued the case in court ever since.
Today the Federal Appeals Court found in favour of Microsoft. The court said in its conclusion that the demands of the US government would effectively allow the US Stored Communications Act (SCA) to be used to gain access to any information anywhere in the world, a use for which it was never intended.
"US-based providers alone may be compelled to give US authorities access to information held anywhere in the world, without regard to applicable foreign law or whether the customer-provider relationship has any substantial nexus to the
US," said the Appeals Court ruling (PDF).
"This Court should not endorse that view, which risks placing US providers at a significant competitive disadvantage in foreign markets.
"This Court should conclude that the SCA does not authorise US courts to issue warrants that operate extraterritorially to compel providers to disclose foreign information lacking a substantial nexus to the US.
"Alternatively, if the Court concludes otherwise, it should require the magistrate judge to conduct an international comity analysis before deciding whether the warrant in this case should be enforced in respect to information stored in Ireland."
The result will please privacy campaigners worried about the reach of the US authorities in the wake of the Snowden revelations, and US cloud providers that were concerned about what a Microsoft defeat would mean for trust in their businesses by international customers.
A spokesperson from the Electronic Freedom Foundation (EFF) provided the following statement.
"This is a groundbreaking decision that helps protect privacy rights around the world. The court concluded that under the Stored Communications Act the government can't use a US search warrant to obtain a customer's email stored on servers outside the country.
"In our amicus brief supporting Microsoft in this case, we urged the court to reject the government's argument that the search warrant it obtained for email contents was like a subpoena that would require Microsoft to turn over information, regardless of where it was stored.
"The court recognised the vital privacy protections under the SCA, and correctly ruled that the government can't use a US search warrant to force Internet service providers to reach email stored outside the US."
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