Judge may hold Microsoft in contempt after refusal to hand over foreign data

Obama administration contends that company with operations in US must comply with warrants for data, even if stored abroad. A federal judge may hold Microsoft in contempt of court this week over its refusal to give the US government data stored overseas.

Judge Loretta Preska, chief of the US district court in New York, gave the company until Friday to comply with an order which could further dent trust in the cloud. In a statement on Tuesday Microsoft, citing privacy concerns, told Ars Technica it would continue to defy the court order. “We will not be turning over the email.”


US prosecutors who are investigating narcotic trafficking obtained a search warrant last December to access an email account controlled and maintained by Microsoft servers in Dublin, Ireland.


The Redmond-based technology company resisted, arguing that emails belong to its customers and that the servers are beyond US jurisdiction, a challenge to the Obama administration’s contention that a company with operations in the US must comply with warrants for data, even if stored abroad.


Judge Preska ruled in July that Microsoft must comply because it was a US company and controlled the data. She suspended enforcement of the order pending an appeal by the company.


In a procedural wrangle the judge lifted the suspension last week, saying the ruling was not appealable, but added that Microsoft could in fact obtain an appeal if it refused to comply and was found in contempt. “If Microsoft refuses to comply, the court could find Microsoft in contempt, which would be a final order subject to appellate review,” the judge wrote.


Microsoft said all sides agreed the case should and would go to appeal. “This is simply about finding the appropriate procedure for that to happen.” The government asked Judge Preska to hold Microsoft in contempt, leading to a “properly appealable final order”.


By handing over the data Microsoft would violate Irish law. A graver concern for the company, and other US technology giants, is another blow to public trust in their ability to protect privacy.


Several companies, including AT&T Inc, Apple Inc, Cisco Systems Inc and Verizon Communications Inc, have filed court briefs supporting Microsoft. They fear losing billions of dollars in revenue to foreign competitors who could be perceived as better guardians of privacy.


The German government has reportedly told Microsoft it will shun data storage from US companies unless the ruling is overturned.


In seeking the emails the US government was looking to sidestep legal protections enshrined in the constitution’s fourth amendment, Brad Smith, Microsoft’s general counsel, wrote in the Wall Street Journal. “Timeless values should endure, and digital commons sense should prevail.”


Trust in the cloud has been battered by Edward Snowden’s revelations about US surveillance and by the recent hacking of hundreds of celebrities’ photos. It is unclear which government agency is seeking the emails stored in Dublin because the warrant and all related documents are sealed.


Guardian.com