This decision overruled the previous verdict of a lower court, and was hailed by Microsoft and several technology corporations as a victory for the privacy rights of its customers. The case also attracted the attention of several foreign governments, particularly privacy regulators in the EU. Notably, during the trial, Ireland's Minister for Foreign Affairs and Data Protection asked the EU to formally support Microsoft. The DoJ's warrant, had it been upheld, threatened to nullify protections granted to EU citizens under national data privacy laws, and make any individual's information subject to seizure and scrutiny by the US Government.
Several lobbying groups and multinational corporations, including Apple, Accenture and Verizon had filed briefs in support of Microsoft's position. A verdict against Microsoft would have made it extremely difficult for US cloud providers and technology companies to sell their products and services in other countries. Users of US services would be concerned with the confidentiality of their data or records, and the threat of US state access.
The DoJ, for its part, argued that a federal legislation - the Stored Communications Act - empowered US law enforcement authorities to issue such warrants to US companies. Barring access, it was argued, would allow hackers, drug dealers and other criminals to escape prosecution in the US by deliberately moving information offshore.
Countering these arguments, Microsoft contended that these communications were held by it 'in trust', on behalf of its customers, and were beyond the reach of US regulators. Microsoft successfully argued that the actual disclosure of information takes place at the location where the information is stored, and not, in the case of remote access, where the information is reviewed. This would mean that the search and seizure would be subject to the laws of Ireland and not the Stored Communications Act.
Microsoft also convinced the court that a ruling in favour of the DoJ would open a Pandora's Box of worries, and would result in law enforcement authorities of foreign countries demanding information stored in the US. The court's decision to strike down the DoJ's warrant allows foreign citizens to rely on their national privacy laws, without fear of US law enforcement agencies exercising sweeping powers of investigation against companies to seize their private information.
Sajai Singh is Partner, and Yajas Sethlur is Associate at JSA, Advocates and Solicitors. Views expressed are personal