Supreme Court drops lawsuit over Microsoft customer data stored overseas due to CLOUD Act

Attorney Josh Rosenkranz and Microsoft President Brad Smith after the Supreme Court hearing earlier this year. (Microsoft Photo)

The U.S. Supreme Court has dismissed a case that pitted Microsoft against the Department of Justice over emails the company has stored in an overseas server.

Both parties asked the court to drop the case after Congress passed the CLOUD Act as part of the omnibus spending bill in March. They agreed that the new law rendered the lawsuit moot.

The case reached the Supreme Court after Microsoft refused to pull customer data from a server in Ireland that federal agents demanded as part of a criminal investigation.

The CLOUD Act clarifies the authority of the federal government when requesting user data that U.S. tech companies store abroad. The law limits that authority to countries that meet digital privacy and security standards and have entered into special agreements with the U.S.

Microsoft President Brad Smith issued this statement Tuesday after the Supreme Court dismissed the case:

We welcome the Supreme Court’s ruling ending our case in light of the CLOUD Act being signed into to law. Our goal has always been a new law and international agreements with strong privacy protections that govern how law enforcement gathers digital evidence across borders. As the governments of the UK and Australia have recognized, the CLOUD Act encourages these types of agreements, and we urge the US government to move quickly to negotiate them.

Microsoft was one of the chief advocates for the act and celebrated its passage as “an important milestone in the journey to modernize the law, enable enforcement officials to do their jobs and protect people’s privacy rights across borders.” But privacy advocates have raised concerns about the new law because it gives the executive branch broad authority to strike data-sharing deals with other countries.

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