Microsoft Launches New Constitutional Challenge Against Government Over Secret Data Requests

Microsoft has just opened a new chapter in the software industry’s pushback against alleged federal government overreach by filing a constitutional challenge over indefinite government gag orders when the government subpoenas information from customer cloud accounts.  Microsoft’s complaint alleges that the orders violate First Amendment free speech rights and Fourth Amendment rights regarding unreasonable government search and seizure of property.

According to The Wall Street Journal,  Microsoft is claiming that a gag provision under the Stored Communications Act “has significantly expanded the government’s power to conduct secret investigations.”  The Wall Street Journal reports that Microsoft’s position is that the government “has exploited the transition to cloud computing to expand its power” and that the fact that private information is moved from a file cabinet to the cloud does not fundamentally change the constitutional rights that people have to that private information.

The text of the Stored Communications Act is codified at 18 U.S. Code Chapter 121, Section 2703(b) of the Stored Communications Act states as follows:

(b)Contents of Wire or Electronic Communications in a Remote Computing Service.—

(1) A governmental entity may require a provider of remote computing service to disclose the contents of any wire or electronic communication to which this paragraph is made applicable by paragraph (2) of this subsection—

(A)without required notice to the subscriber or customer, if the governmental entity obtains a warrant issued using the procedures described in the Federal Rules of Criminal Procedure (or, in the case of a State court, issued using State warrant procedures) by a court of competent jurisdiction; or

(B) with prior notice from the governmental entity to the subscriber or customer if the governmental entity—

(i)uses an administrative subpoena authorized by a Federal or State statute or a Federal or State grand jury or trial subpoena; or
(ii)obtains a court order for such disclosure under subsection (d) of this section;
except that delayed notice may be given pursuant to section 2705 of this title.

(2) Paragraph (1) is applicable with respect to any wire or electronic communication that is held or maintained on that service—

(A)on behalf of, and received by means of electronic transmission from (or created by means of computer processing of communications received by means of electronic transmission from), a subscriber or customer of such remote computing service; and

(B)solely for the purpose of providing storage or computer processing services to such subscriber or customer, if the provider is not authorized to access the contents of any such communications for purposes of providing any services other than storage or computer processing.

Reuters reports that the Microsoft claims it has received 5624 legal orders under the Stored Communication Act, of which 2576 also contained a gag order, and that most requests involved individuals rather than companies.

According to The Economic Times, Microsoft has decided to pursue this challenge because its business model is increasingly relying on cloud services and Microsoft is concerned that the government’s actions are going to discourage the public from further adopting the cloud business model.  The Economic Times is also reporting that Microsoft is citing as precedent for its case a ruling in 2014 where U.S. Magistrate Judge Paul Grewal rejected a Department of Justice request to have an unlimited gag order over the search of a Microsoft Hotmail account and said that a limited gag order might be appropriate, as well as a Supreme Court ruling that police must announce themselves when they serve a warrant.

Who is likely to prevail here?  As you might expect, Forbes was able to find experts on both sides of the issue.   However, Forbes raised an interesting point that if a court were to find in favor of the government on this case, it sets a precedent for other governments to expect similar access, which could be problematic.

It’s safe to say that Microsoft’s filing of this case on the heels of the very public debate regarding the Department of Justice decision to order Apple to decrypt the San Bernardino terrorist smartphone is a strategic move on Microsoft’s part intended to capitalize on the current public sentiment against the federal government for its perceived intrusion on individual privacy rights.   The software industry has clearly decided that the time is right to draw a line in the sand on government overreaching into its industry.  It is unlikely that the government is going to be able to sidestep a showdown in this case in the same way it was able to do in the Apple dispute.


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Kristie Prinz