Microsoft warns of risks to Irish operation in US search warrant case

Tech giant tells congressional panel that US law has failed to keep pace with technology

Microsoft’s failure to protect itself against a US court ruling ordering it to hand over emails stored in Dublin to federal investigators would raise “a new set of risks” for its Irish operation, the company’s president said.

Speaking after testifying before a US congressional panel in Washington, Brad Smith, who is also Microsoft's chief legal officer, told The Irish Times that the company's goal was to "continue to operate one of the world's largest data centres in Ireland" but that the outcome of a court appeal in New York raises a concern.

The US company is appealing a court order to the Second Circuit Court of Appeals to stop the US government obtaining customer emails held on computer servers in Dublin as part of a federal investigation into drug trafficking.

The lawsuit centres on 1986 US legislation, the Electronic Communications Privacy Act, and whether the executive branch of the US government has the legal authority to use a search warrant to reach data held outside the United States held in Microsoft's Irish operations.


"Our concern is that if we lose the case more countries across Europe or elsewhere are going to be concerned about having their data in Ireland, " Mr Smith said, after testifying before the House judiciary committee.

Asked what would happen to its Irish unit if the company loses the case or doesn't convince Congress to pass updated legislation governing cross-border data held by American companies, the Microsoft executive said: "We'll certainly face a new set of risks that we don't face today."

He added that the issue could be resolved by an executive order by the White House or through international negotiations between the Irish Government or the European Union and the US.

The Manhattan-based appeals court is still weighing a case that is closely watched by US technology giants, civil liberties groups and the Obama administration.

“The US government’s position is that it doesn’t need to pay any attention to Irish law,” said Mr Smith.

“Its argument is that it is not actually doing anything that is legally relevant in Ireland. It is just telling us to fetch emails and bring them back to the US and then turn them over in the United States.”

During his testimony, Mr Smith produced an antiquated piece of technology - IBM’s first laptop, which was released the year the privacy act was passed - to argue his point that US legislation had failed to keep pace with advances in technology.

On a separate issue, Mr Smith told the panel that Microsoft “wholeheartedly” supported Apple’s refusal to create a “backdoor” access to unlock data held on one of the iPhones of the San Bernardino killers.

The company would be filing a “friend of the court” brief in support of Apple’s case, he said.

Tim Cook, Apple chief executive, said in an interview this week that the only way to access the information would be to "write a piece of software that we view as sort of the equivalent of cancer" .

The California company has asked a US court to reject an order forcing it to unlock the iPhone of Syed Rizwan Farook, who, along with his wife, killed 14 people in San Bernardino, California in December.

Apple argued in a fresh court application filed yesterday that the order was “unprecedented” with “no support in the law.”

“This is not a case about one isolated iPhone,” the technology giant said in its filing. “No court has ever authorized what the government now seeks, no law supports such unlimited and sweeping use of the judicial process, and the constitution forbids it.”

Simon Carswell

Simon Carswell

Simon Carswell is News Editor of The Irish Times