Obama Administration Says the World's Servers Are Ours

An anonymous reader points out this story about the U.S. Justice Department's claim that companies served with valid warrants for data must produce that data even if the data is not stored in the U.S. Global governments, the tech sector, and scholars are closely following a legal flap in which the US Justice Department claims that Microsoft must hand over e-mail stored in Dublin, Ireland. In essence, President Barack Obama's administration claims that any company with operations in the United States must comply with valid warrants for data, even if the content is stored overseas. It's a position Microsoft and companies like Apple say is wrong, arguing that the enforcement of US law stops at the border. A magistrate judge has already sided with the government's position, ruling in April that "the basic principle that an entity lawfully obligated to produce information must do so regardless of the location of that information." Microsoft appealed to a federal judge, and the case is set to be heard on July 31.

Comments

Maybe, maybe not.

[Frosty Piss]

Microsoft is based in the United States, so there may be some valid argument here that as an American company, Microsoft data regardless of where "in the cloud" it is stored is subject to American legal rulings.

The *real* question is what about companies that do business here but are based in other countries?

Re: Maybe, maybe not.

[mSparks43]

Someone pointed out that governments don't really matter anymore.

Doesn't matter how true it is. They are gonna bitch scream and stamp their feet till mommy buys them what they want.

Re:Maybe, maybe not.

[bloodhawk]

The huge MASSIVE problem with that position is that many other countries have VERY specific laws about data, especially privacy data leaving the borders. This puts international companies in a hugely awkward position where they must break one law or the other, either of which potentially could result in huge fines or Jail time. The US doesn't get to determine what other countries laws are and they definitely do not get to override them.

Re:Maybe, maybe not.

[bloodhawk]

there is a LOT to see here, this is definitely not a non-issue. This inherently makes US companies a danger to do business with many countries for hosting/cloud services where many countries have laws and/or industries with regulatory requirements that demand data cannot be taken out of the country. This ruling if upheld will make US companies like Amazon, MS, Apple, Google et al a no go when it comes to hosting, the financial ramifications are rather massive.

Re:Maybe, maybe not.

[roman_mir]

Again, the foreign companies are not USA citizens and foreign companies are not subject to USA law on their own land. However if you are an American then you are a SECOND CLASS CITIZEN today (or lower) because foreign banks that have any presence in the USA whatsoever DENY your request to open a bank account :)

If you think this is normal and that is how all countries operate, think again. When you are in Switzerland if you are from India or from China or from Russia or from Germany or from UK or from Brazil or from Uganda you are not going to be prevented from opening a bank account. However if you are from good old US of A you will not be able to open a bank account if you do not have another passport, that's what it is like today to be an American. USA government turned USA citizens into persona non grata for foreign businesses.

By the way, USA is the only of 2 or 3 countries in the world that tax 'world income', as in even if you are not a resident in the country, you are forced to file income taxes every year and above certain income you are forced to pay USA related income taxes :) Great success building that 'independence' and 'freedom'. USA was created to escape this type of persecution, now it is one of the worst offenders against human rights in the world and when I say human rights I am talking about the right to be an individual, the right to self determination, the right not to be a slave to a collective.

By the way, there is 0% wrong with having foreign bank accounts all over the world. AFAIC in today's society everybody needs to have more than one passport and many many many bank accounts and business investments around the world not tied to their country of residence. Of-course you don't have to do it, but then you are owned, aren't you?

Re:Maybe, maybe not.

[physicsphairy]

if a country's legal system has a valid case for something, and issues a court order ordering you to turn something over, you can't just avoid a court order by saying "it's in my summer home in another country!"

That's fine. I'm perfectly okay with saying Microsoft has to produce all of their financial information, legal analysis, etc., when required, no matter where it is stored, as a provision of being legally incorporated in the United States.

Where this gets pernicious is that the data they are being required to present is *not* their data. They are a third party holding the data on someone else's behalf. Note the courts specifically say that this would not be okay if it was a physical document, their reasoning for being allowed to subpoena an electronic document is essentially that it's trivial for them to get away with it.

From the article:

The e-mail the US authorities are seeking from Microsoft concerns a drug-trafficking investigation. Microsoft often stores e-mail on servers closest to the account holder.

So presumably this data belongs to someone in Ireland. It's data which was created in Ireland. It may be data which has never left Ireland. But because they made the mistake of dealing with a US company, the data of an Irish citizen sitting in a room in Ireland where Irish law prevails is now being exported to America without Irish courts having any say in the matter.

Re: Maybe, maybe not.

[Anonymous Coward]

Its worse than that, much like the NSA's over reach scaring off other countries from American tech products, this kind of ruling encourages multinationals to never set up business in the USA. The USA is a big market worth a lot of money, but if they keep piling up reasons why a multinational would want to stay the hell away, eventually companies will stop bothering.

Re:Maybe, maybe not.

[DamnOregonian]

This is why the data should never have been in Microsoft's possession to begin with, and why it matters what companies you do business with, and what countries they operate in/what laws they are subject to in the various jurisdictions they're incorporated in.

Re: Maybe, maybe not.

[jhol13]

Suppose that the data resides in Swizerland (Swiss privacy laws prohibit moving data overseas - don't know exact details, but the idea should be obvious). Suppose the credentials to give the data is only on the hands of a swiss administrator - no american has access to the data/server/credentials in Swizerland. In this case no matter who in the company orders to give him the credentials, the administrator in Swizerland cannot give them or he would be breaking the Swiss law.

Re: Maybe, maybe not.

[Immerman]

So if I say to my foreign counterpart "give me this data that I have been subpoenaed to provide" I am obstructing justice? You could argue that the foreign branch is obstructing US justice when they implement the policy of automatic refusal unless/until a local subpoena complying with local legal requirements is received, but nobody there is personally bound by US law, so it's not particularly relevant unless they want to travel to the US in the future. Meanwhile they might very well be in violation of local law by supplying said data without the appropriate local legal authorization.

I'm not happy with this - it seems like an issue where there's no good solution: The US can't be allowed to be "world cops" to this degree - we've proven repeatedly that we've lost whatever moral superiority *might* have once entitled us to such a position - call me paranoid but handing more power to the gestapo-in-training seems to always go badly for the common man. Meanwhile *without* such authority I can easily imagine elaborate corporate data shell games where all sensitive data is inaccessible to any government. The only answer I can see is international treaties bringing corporations to heel, but I suspect those would be tricky in the extreme to get right, even if the self-same megacorps didn't already have pretty much all the relevant politicians in their pocket.

Re:Will this affect overseas profits tax evasion?

[Anonymous Psychopath]

Will this influence the tax gimmick where the HQ is overseas so the profits don't have to have taxes paid on them?

Why is it the money can evade the government but the data can't?

Tax evasion is illegal. Tax avoidance, which is what these companies are practicing, is not. There's no criminal wrongdoing taking place.

Even though the politicians bluster on and on about the problem, they always forget to mention that they are the ones with the power to fix it, if they chose to.

A larger legal question arises here

[bobbied]

I believe that Microsoft is right to claim the US government doesn't have jurisdiction over data stored outside of the United States. There simply MUST be a clear distinction maintained over where something is located, or country borders don't mean anything. If law enforcement in one country can force the production of evidence located in another country, then it's a free for all and borders have no meaning.

For instance... Lets say that a country (not the USA) has strict privacy laws about data collected and stored digitally and how it can be used. Lets say that they strictly forbid the sharing of specific kinds of data without written consent from the individual the data is about. If Microsoft operates in that country and collects data from it's users and then receives a court order for data from the USA for data stored in the country with strict privacy laws, what is Microsoft to do? Violate the court order and obey the laws under which the data was collected and stored OR violate the laws of another country? If borders mean ANYTHING, Microsoft must obey the local laws of the countries they operate in. So if the data is not here in the USA, the USA cannot force production of the data though the courts.

I understand that this is rife for abuse because it allows the hiding of criminal evidence overseas where it is beyond direct USA reach, but there are processes to obtain such evidence though diplomatic and international law enforcement channels in place. For Civil litigation, there are ways to work though other countries legal systems (albeit inconvenient and expensive ones). So, where I get there are problems, we really cannot just unilaterally decide we have the authority to demand a company produce data held overseas and force them hand over evidence which is not within our borders.

Finally, there is the "How would you feel if somebody did it to you?" test. Let's say the US was where the data was located and some other country was demanding that the data be sent back to them and felt they could enforce their will within the USA.... Would we not feel offended? I dare say we would.