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Does US Have Right To Data On Overseas Servers? We're About To Find Out (arstechnica.com)
Long-time Slashdot reader quotes Ars Technica:
The Justice Department on Friday petitioned the US Supreme Court to step into an international legal thicket, one that asks whether US search warrants extend to data stored on foreign servers. The US government says it has the legal right, with a valid court warrant, to reach into the world's servers with the assistance of the tech sector, no matter where the data is stored.
The request for Supreme Court intervention concerns a 4-year-old legal battle between Microsoft and the US government over data stored on Dublin, Ireland servers. The US government has a valid warrant for the e-mail as part of a drug investigation. Microsoft balked at the warrant, and convinced a federal appeals court that US law does not apply to foreign data.
According to the article, the U.S. government told the court that national security was at risk.
The request for Supreme Court intervention concerns a 4-year-old legal battle between Microsoft and the US government over data stored on Dublin, Ireland servers. The US government has a valid warrant for the e-mail as part of a drug investigation. Microsoft balked at the warrant, and convinced a federal appeals court that US law does not apply to foreign data.
According to the article, the U.S. government told the court that national security was at risk.
Any employee of this local subsidiary can simply refuse to comply with the order (I expect every single country has a law that allows employee to refuse employer order to break the law). If we are talking about European countries then it would also be impossible to fire him for this, as such firing would be deemed as reprisal by (local) court. Given that the company (local subsidiary) is not even really interested in firing him, it would even likely lead to employee keeping the job (reinstatement).
So why not go the way it has always been and should be in the future: Ask the court in the other country to help in that matter. If the U.S. court can prove that the data is really needed in a case, then it should be no problem to get it in a way legal in the country it is stored.
If the idea of U.S. jurisdiction to data stored in other country really gets track, the only result will be that companies will no longer directly operate in other countries, but always have local intermediates which are legally independent of the U.S. company.
Precisely. This is the US government asserting jurisdiction where it clearly has none, using the tenuous arguments of "cyberspace has no borders" and "corporate citizenship traces back to its origin". If the SCOTUS agrees, then the US has taken a step toward delegitimizing every other nation's sovereignty, over yet another skirmish in the "war on drugs" inflated into a bogus national security concern.
A subsidiary is a local company established under local laws and subject to all local laws. It will have its own board of directors - who may well all be employees of the owning company, but still have a separate duty to obey the law. If such a subsidiary breaks the local law, it is a criminal offence and the directors become liable. If they are outside the country, the assets of the company may be seized.
If MS sets up the Irish subsidiary to own and operate the servers, it will be impossible for that subsidiary to obey the US order - because it is a separate legal entity which the US courts have no jurisdiction over.
Between those two legal doctrines, the case is clear. If MS DIDN'T vest ownership in its Irish subsidiary, then it is an idiot. This appears to be part of the story here...
The court simply has to find that the Irish company is not actually a separate entity. And it's not. It's a shell set up to dodge the law (primarily to not pay taxes). They don't even try to hide it. It's trivial to trace it to actual US citizens. Declare the "Irish" subsidiary to be a shell under the actual ownership and control of Americans (because it is), then throw them in jail for hiding tens of billions from the IRS and breaking tons of other US laws (because they are).