The General Data Protection Regulation was adopted last week by the European Parliament with an aim to provide an unified data protection regime across member states. It was earlier adopted by the Council of the EU, and is to come into effect in a little over two years after its publication in the EU Official Journal. The legislation will replace the EU Data Protection Directive, which dates back to 1995.
In a filing in the U.S. Court of Appeals for the Second Circuit, Microsoft's lawyer E. Joshua Rosenkranz referred to Article 48 of the regulation, which states that any “judgment of a court or tribunal and any decision of an administrative authority of a third country requiring a controller or processor to transfer or disclose personal data may only be recognised or enforceable in any manner if based on an international agreement, such as a mutual legal assistance treaty.....”
This rule sits well with Microsoft’s own position in the dispute. It has favored an inter-governmental resolution to the U.S. demand for access to the emails in Ireland, through the use of "mutual legal assistance treaties" the U.S. has with other countries including Ireland. The government has argued that the procedure is time-consuming.
Although the government has a warrant for access to emails held by Microsoft of a person involved in an investigation, the company has argued that nowhere did the U.S. Congress say that the Electronics Communications Privacy Act "should reach private emails stored on provider's computers in foreign countries." Microsoft provided non-content information held on its U.S. servers in response to the search warrant, but tried to quash the warrant when it concluded that the account and the content of the mails were hosted in Dublin.
U.S. Magistrate Judge James C. Francis IV of the U.S. District Court for the Southern District of New York had earlier ruled that the warrant under the Stored Communications Act, a part of the ECPA, was "a hybrid: part search warrant and part subpoena." It is executed like a subpoena in that it is served on the Internet service provider, which is required to provide the information from its servers wherever located, but does not involve government officials entering the premises, Judge Francis ruled. Microsoft holds that Congress should be asked for a decision on whether warrants under the ECPA can be executed abroad.
Under the new EU regulation, fines can be levied for infringement of certain provisions such as Article 48 of up to 4 percent of the total worldwide annual turnover of an undertaking in the preceding financial year.
“Article 48’s enactment confirms that, absent a clear statement from Congress, the Stored Communications Act should not be read to extend to data stored abroad,” Rosenkranz wrote in a letter to the clerk of the court. “The presumption against extraterritoriality serves to guard against precisely the sort of international tension and intrusion on foreign sovereignty that the Government’s reading of the Act would engender.”
The proceedings in this high-profile lawsuit playing out in the appeals court have been rather slow in the last few months, with a decision by the court eagerly awaited because of its wide implications.