Out-Law News 2 min. read

US court drops long-running data access case involving Microsoft

A long-running case over whether US authorities have a right to access data stored outside of the country has been brought to an end.

The US Supreme Court determined (3-page / 56KB PDF) that a case before it between the US government and Microsoft over access to data held by the technology company on servers in Ireland, was "moot" in light of recent developments.

In 2016, the US Court of Appeals ruled that Microsoft did not have to disclose data on a customer it held on the basis that the warrant issued under the 1986 US Stored Communications Act did not apply to data held outside the US. The authorities were looking for the information as part of a criminal investigation.

In October last year, however, Microsoft confirmed that the US Supreme Court had decided to hear an appeal from the US government in the case. The US government had earlier argued that the ruling would allow "electronic communication service providers" to "thwart legitimate and important criminal and national security investigations, while providing no offsetting, principled privacy protections".

Since then, however, US law makers passed the Clarifying Lawful Overseas Use of Data (CLOUD) Act into law.

The Cloud Act updates the Stored Communications Act and specifically provides that technology companies are obliged to "preserve, backup, or disclose the contents of a wire or electronic communication and any record or other information pertaining to a customer or subscriber" in their possession when asked to do so under warrant "regardless of whether such communication, record, or other information is located within or outside of the United States".

After the Cloud Act came into force, the US government obtained a fresh warrant which it served on Microsoft asking the company to hand over the data in the case. Microsoft has yet to confirm its response to the new warrant.

According to the US Supreme Court, however, there is "no live dispute" remaining between the US government and Microsoft over the basis on which the court granted permission to appeal, and the parties are also in agreement "that the new warrant has replaced the original warrant".

"This case, therefore, has become moot," the US Supreme Court said.

"Following the Court’s established practice in such cases, the judgment on review is accordingly vacated, and the case is remanded to the United States Court of Appeals for the Second Circuit with instructions first to vacate the District Court’s contempt finding and its denial of Microsoft’s motion to quash, then to direct the District Court to dismiss the case as moot," it said.

Earlier this month, Microsoft said that the CLOUD Act "both creates the foundation for a new generation of international agreements and preserves rights of cloud service providers like Microsoft to protect privacy rights until such agreements are in place".

Microsoft president Brad Smith said: "Providers can go directly to court to raise comity concerns under a new statutory process when the US seeks a warrant that goes beyond the scope of an agreement and that conflicts with a foreign law."

Comity is a principle of law that provides for the recognition of and respect for laws in other jurisdictions, generally provided for through international agreements. 

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