A federal appeals court has ruled that Microsoft could not be forced by the government of the United States to hand over data from a user's email account that is stored in overseas servers.
Microsoft's triumph, which allows it to maintain the privacy of users, can also be considered a big win for privacy advocates and the entire tech industry.
The case started in 2013, when a district court in New York issued a warrant to acquire emails and other information regarding a Microsoft customer who was allegedly involved in narcotics trafficking. The company partially complied with the request by revealing metadata and non-content information regarding the user, but it argued that since the emails were stored in a server located in Dublin, Ireland, the warrant issued by the court had no jurisdiction over it.
In 2014, the request was reiterated by a federal magistrate judge, but Microsoft decided to appeal to the 2nd Circuit, which led to the landmark ruling.
The decision of the court of appeals states that the 1986 law, which was the basis of the original warrant, does not give courts the authorization to issue and enforce warrants to seize the content of customer emails to service providers based in the United States, if the data is exclusively stored in overseas servers.
Microsoft is believed to be the first company in the country to challenge a domestic search warrant for data that is stored overseas.
According to Microsoft president and chief legal officer Brad Smith, the company obviously welcomes the decision, which provides users with more confidence in laws in place for the protection of their privacy.
The strong interest in the case by other tech companies was due to the concern that prosecutors, not just of the United States but also of other countries, might gain immense power to seize emails belonging to their citizens but were stored in foreign countries.
"It would have been like the Wild West, with no clear, stable legal rules applying," said Center for Democracy & Technology senior counsel Greg Nojeim.
In addition, many tech companies have established overseas data centers, with Ireland being a popular location due to the tax incentives that the country provides and its cool climate, which is ideal for powerful servers.
The case might still be revisited by the Supreme Court, so there is still a chance that the ruling may be rescinded. In addition, governments may start pushing for data localization regulations which would require companies to store data within the countries where they are based in.
Earlier in the year, Microsoft filed a lawsuit against the United States Justice Department over what it described as "unconstitutional" gag orders.