BizTech Law Blog

Is customer e-mail data maintained by US companies on overseas servers subject to US jurisdiction?

Microsoft may soon find itself being held in contempt of court after refusing to abide by a U.S. District Court Order, requiring it to produce customer e-mail data stored by the company in Dublin, Ireland.  The United States Department of Justice previously sought and obtained a search warrant for the production of customer e-mail data maintained by Microsoft as part of a criminal investigation relating to narcotics trafficking.

Judge Loretta Preska, chief judge of the United States District Court for the Southern District of New York, ordered Microsoft to produce the e-mail data in July, finding that, although the data was held overseas, it remained under Microsoft’s possession and control, over which the court maintained jurisdiction. Microsoft has yet to comply, claiming that the court lacks jurisdiction over the foreign e-mail data. The judge has since imposed a Sept. 5 deadline for the parties to inform the court on how they plan to proceed.

Microsoft and other U.S.-based technology companies, including Verizon, Apple, and Cisco, have claimed that the dispute fundamentally relates to the protection of customer privacy and that a ruling in favor of the justice department would conflict with foreign data protections laws, exposing the companies to potential sanctions, and would have significant global economic repercussions. At least one foreign government, Germany, is already said to have indicated that it will refuse to use data storage services provided by U.S.-based companies so long as the ruling stands.

While the decision to require Microsoft to produce foreign e-mail data is likely to be appealed and litigated for some time, the end result (whatever it may be) is certain to have significant ramifications for the global technology industry. For more information, Judge Preska’s August 29, 2014, Memorandum and Order can be found here.

Categories: Privacy