Last month, the European Court of Justice cited the Snowden revelations and US domestic surveillance to invalidate a 15-year-old “Safe Harbor” agreement under which the US and Europe had been exchanging data. This has created massive uncertainty for global companies doing business in Europe, but especially US companies — because it effectively prevents European data from being sent to the US.
The Financial Times now reports that Microsoft will set up German data centers outside the reach (presumably) of the US legal and intelligence apparatus. The move complies with the European Court of Justice’s new mandate and concerns about exposing European citizens’ data to privacy breaches in the form of US surveillance.
Beyond locating the data centers in Europe — something that most US internet companies will probably now be compelled to do — Microsoft indicated that the data centers will be under the control of Deutsche Telekom. This configuration may put Microsoft data in Europe beyond the reach of US courts and the US government. That question obviously has yet to be tested.
US courts have said that US companies are compelled to deliver information on US citizens, even if that data resides outside the US.
While this new Microsoft-Deutsche Telekom arrangement may be a model for other US companies doing business in Europe, it doesn’t address European domestic spying on Europeans and foreigners on European soil.
Germany and other European governments have been found conducting surveillance on their own citizens and foreign nationals.
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