United States: Global Perspectives On High Court Microsoft Warrant Case

Microsoft Corp.'s heated dispute with the U.S. Department of Justice over data stored on its servers abroad has more parties weighing in, this time offering international perspectives. On Dec. 13, 2017, the governments of Ireland and the United Kingdom, the New Zealand privacy commissioner, the United Nations special rapporteur on the right to privacy, and the European Commission filed amicus briefs before the U.S. Supreme Court. The briefs underscore the important implications of the U.S. Supreme Court's decision for global data transfers and international users' privacy.

Background: Microsoft's Challenge to the Extraterritorial Application of the Government's Warrant

In Microsoft, a U.S. federal court issued a Stored Communications Act warrant requiring Microsoft to produce information stored on Microsoft's servers domestically and in Ireland. Microsoft moved to quash the warrant as to all material stored in Ireland on the ground that Section 2703 of the SCA lacks extraterritorial reach. After a federal judge denied Microsoft's motion and held Microsoft in civil contempt for noncompliance, the Second Circuit agreed with Microsoft that the government's attempt to apply the statute extraterritorially was impermissible. The U.S. Supreme Court granted the DOJ's petition for writ of certiorari on Oct. 16, 2017. Oral arguments are scheduled for Feb. 27, 2018.

In its opposition brief, Microsoft contended that extending the SCA to data stored abroad could compel U.S. companies to "violate foreign privacy laws" and generate "international discord," particularly when Article 48 of the General Data Protection Regulation is implemented. Microsoft reasoned that, under Article 48, court orders requiring data transfers may only be recognized if they are based on international agreements such as mutual legal assistance treaties, which facilitate cross-border evidence sharing. The DOJ argued that the GDPR does not necessarily prohibit disclosure of foreign-stored information and that, if any conflict of laws were to materialize, the U.S. "judicial system [would be] equipped to handle that scenario." It also emphasized the superiority of SCA-based warrants to the MLAT process, which it characterized as "slow" and often "futile."

Amicus Briefs Provide Varying International Perspectives

On Dec. 13, several foreign governments and other international authorities weighed in regarding potential implications of the U.S. Supreme Court's decision.

Although purporting to take a neutral position, the Irish government urged the U.S. Supreme Court to affirm the judgment of the Second Circuit provided it had not made "any obvious error." It emphasized the importance of respecting Irish sovereignty and declared that the MLAT process "represent[s] the most appropriate means to address requests" such as those at issue in Microsoft. It acknowledged that, "in certain circumstances, an Irish court [may] order the disclosure by an Irish corporation" of information that is "physically located in another jurisdiction, provided certain matters are demonstrated." However, it explained that this would generally only occur in the "absence of alternative means."

In contrast, the U.K. government's brief was critical of the Second Circuit's decision. While again claiming to be neutral, the U.K. emphasized that it did not consider a request for data stored overseas "but accessible to that [p]rovider from within the requesting country" to be inconsistent with international comity. It noted that the U.K., through the Investigatory Powers Act, possesses the same authority the DOJ asserts it has under the SCA. The U.K. also expressed its desire to negotiate a new bilateral agreement with the United States that avoids the pitfalls of the MLAT process, which it described as often too slow for responding to "modern criminal investigations." It emphasized that the Second Circuit's decision was a "serious impediment to ... the viability of this type of agreement" because it would deprive the U.S. of its important domestic authority to obtain data stored abroad through a warrant.

The New Zealand privacy commissioner highlighted the principles of international comity and territoriality. He emphasized the value of "the presumption against extraterritoriality," which "upholds the right of each jurisdiction to determine the content of its own law" and "ensures clarity as to the responsible jurisdiction."

For the United Nations special rapporteur on the right to privacy, however, jurisdictional issues in the cyberspace realm are far from clear. He contended that, when data is stored in multiple jurisdictions at once and often moves automatically across jurisdictions, the unique "aspects of cloud data storage ... render inchoate the traditional doctrines of territoriality." Given this complexity, he urged the U.S. Supreme Court to "exercise judicial restraint" and decide the case in the "narrowest possible manner," which would facilitate efforts already underway to resolve these thorny jurisdictional questions. Furthermore, considering the "significant international repercussions" at stake, the special rapporteur "agree[d]" with the Second Circuit that "it [is] difficult to dismiss [foreign data protection] interests out of hand on the theory that the foreign sovereign's interests are unaffected."

The European Commission took a surprisingly neutral stance. Noting that both parties had made claims at the certiorari stage concerning whether Microsoft's compliance with a SCA warrant would violate Article 48 of the GDPR, the commission expressed "an interest in ensuring that the Court proceeds based on a correct understanding of EU law." The commission emphasized that Article 48 makes MLATs the "preferred option" for foreign court-ordered data transfers. Nevertheless, the commission rejected Microsoft's argument that MLATs are the only appropriate method for data transfers in response to a court order, explaining that Article 48's requirements are "without prejudice to other grounds for transfer." The commission noted that a transfer to a foreign country could therefore still proceed outside the MLAT process if, for example, it was "necessary for important reasons of public interest" such as combating "serious crime."

The International Impact of the U.S. Supreme Court's Microsoft Decision

The decision of foreign governments and other international authorities to submit briefs in Microsoft demonstrates the global importance of the case on efforts to regulate data privacy and cross-border data flows.

As highlighted in the briefs of the European Commission and U.N. special rapporteur, the U.S. Supreme Court's holding could create potential conflicts of laws, which would put companies facing law enforcement requests in a difficult position. For instance, the U.S. Supreme Court will likely decide Microsoft by early summer, on the heels of the GDPR's implementation this May. The European Commission emphasized that the GDPR generally requires foreign governments to make information-access requests pursuant to MLATs — the procedure the United States government sought to avoid in Microsoft. As the commission explained, the GDPR does contain carveouts for particular data transfers, including those "necessary for important reasons of public interest," but those interests are ill-defined. In light of such uncertainties, companies could face conflicting demands from U.S. and European authorities, with the potential for financial penalties if deemed noncompliant.

The U.S. Supreme Court's decision will also likely come at a time of increased international scrutiny concerning the reach of U.S. law enforcement and surveillance. The Article 29 Working Party, an advisory body composed of representatives from the data protection authorities of each EU member state, recently referenced Microsoft in a statement warning that "[t]he circumvention of existing MLATs or other applicable legal basis under EU law by a third country's law enforcement authority" constituted "an interference with the territorial sovereignty of an EU member state." That same body also expressed "significant concerns" about U.S. privacy protections in its first annual review of the EU-U.S. Privacy Shield, a framework that more than 2,400 organizations have used to transfer personal data from the European Union to the United States. A reversal of the Second Circuit's decision could heighten such international concerns.

As a practical matter, the U.S. Supreme Court's Microsoft holding may also spur companies to make significant enterprise-level decisions, such as migrating user information to data centers abroad or storing data within a single jurisdiction. Companies are already spending millions of dollars to relocate data centers overseas, which often entails erecting new data storage centers, employing information technology management, and training staff in compliance with foreign laws, rules and regulations.

Conclusion

There is little doubt that government information requests will continue to be actively litigated at the domestic and international levels. The question now is to what extent, if any, the U.S. Supreme Court will take into account concerns expressed in the amicus briefs regarding international comity, sovereignty and global privacy laws in the context of data stored abroad. Companies and providers should therefore stay apprised of the U.S. Supreme Court's upcoming decision in Microsoft and subsequent developments both in lower federal courts and on the international stage.

Originally published by Law360 on January 10, 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions