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Does U.S. court ruling threaten the privacy of your data?

Software giant Microsoft have been backed by Apple and a host of other major IT companies in their attempt to overturn a ruling in the U.S. Federal court, according to court filings Microsoft was issued a search warrant relating to a drug investigation last year, compelling the company to hand over customer data from an Outlook email account located in Ireland.

Instead of complying, Microsoft appealed to keep the data private as it resides only on a server in Dublin. As such, U.S. government agencies do not have jurisdiction and should be required to go through international channels, the company argues.

At issue is the Electronic Communications Privacy Act (ECPA), which allows federal and local law enforcement agencies in the U.S. to demand digital records, such as email correspondence, with appropriately served warrants. Microsoft argues Congress did not include stipulations in ECPA that would allow seizures outside the U.S.

If ECPA is interpreted to allow for extraterritorial jurisdiction, it may hurt cloud-based businesses located within the U.S., as international customers would be unwilling to sign up for such services. Further, such a distinction could lead to identical requests from foreign agencies for data owned by U.S. citizens. A lower court previously ruled against Microsoft, rejecting the argument that the warrant was illegal. The company has since taken the argument to the United States Court of Appeals for the Second Circuit.

If you are considering working or storing data in the cloud do your homework thoroughly before committing, find out in which country any potential service supplier has their business registered and, more importantly, where your data will be stored. In view of the above it might be prudent to seek out U.K. based service suppliers who store your data within the U.K., or at least within a European Union member state.

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Louisa is a Chartered Accountant, she qualified in 2007 and has sixteen years experience in accountancy and audit roles in both practice and industry settings.  

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