Microsoft cemented a major legal victory today, as a federal appeals court declined to hear the government’s appeal in a landmark cloud computing case. The government sought to search data stored on Microsoft servers in Ireland as part of a US drug case, arguing the servers were still subject to US warrant laws. A lower court dismissed the government’s case in July, and today’s en banc ruling means that ruling will not be overturned.
The ruling is a significant precedent as US courts seek to reconcile legal borders with the international logic of cloud computing. Although the case was brought by US law enforcement and the crime likely took place within the US, data center logistics made it most efficient for Microsoft to store the data in Ireland. Today’s ruling means police won’t be able to use the Stored Communications Act to reach that data, and it’s unclear what other US law might be employed in its place.
In the years since the case was first tried, law enforcement has employed a number of measures to prevent similar impasses. Last year, the US began negotiations on a mutual legal assistance treaty with the United Kingdom, which would allow US warrants to be served overseas, although such a treaty would not apply to servers in Ireland. A number of countries have also passed data localization laws, requiring certain data to be stored within national borders.
Reached for comment, Microsoft president and chief legal officer Brad Smith applauded the ruling. “We welcome today’s decision,” said Smith in a statement. “We need Congress to modernize the law both to keep people safe and ensure that governments everywhere respect each other’s borders.”
Notably, Smith framed the ruling as a specific call for new laws to clarify the issue of extra-territorial access. “This decision puts the focus where it belongs, on Congress passing a law for the future rather than litigation about an outdated statute from the past,” Smith continued. Previous encryption bills have met with significant criticism from tech companies, most notably the Feinstein-Burr bill introduced last year.
Correction: An earlier version of this case stated that the target of the warrant was a US citizen. In fact, his nationality has been sealed by the court. The Verge regrets the error.