U.S. Supreme Court wrestles with Microsoft privacy fight

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WASHINGTON (Reuters) – Supreme Court justices on Tuesday appeared unsure how to resolve a dispute between Microsoft Corp(MSFT.O) and the Justice Department over whether U.S. law should allow prosecutors to compel technology companies to hand over data stored overseas.

Chief Justice John Roberts and Justice Samuel Alito, both conservatives, hinted at support for the Justice Department during the one-hour argument as the nine-member court wrestled with the technological complexities of email data storage.

Liberal Justices Ruth Bader Ginsburg and Sonia Sotomayor questioned whether the court needed to act in the major privacy rights case in light of Congress currently considering bipartisan legislation that would resolve the legal issue.

A ruling is due by the end of June.

The case pits the interests of tech companies and privacy advocates in safeguarding customer data against the demands of law enforcement in obtaining information crucial to criminal and counterterrorism investigations.

It started with a 2013 warrant obtained by prosecutors for emails of a suspect in a drug trafficking investigation that were stored in Microsoft computer servers in Dublin. Microsoft challenged whether a domestic warrant covered data stored abroad. The Justice Department said because Microsoft is based in the United States, prosecutors were entitled to the data.

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A 2016 decision by the New York-based 2nd U.S. Court of Appeals siding with Microsoft marked a victory for tech firms that increasingly offer cloud computing services in which data is stored remotely. President Donald Trump’s administration appealed that ruling to the Supreme Court.

The appeals court said the emails were beyond the reach of domestic search warrants obtained under a 1986 U.S. law called the Stored Communications Act.

Globally dominant American tech companies have expressed concern that customers will go elsewhere if they think the U.S. government’s reach extends to data centers all around the world without changes being made to the law.

Microsoft, which has 100 data centers in 40 countries, was the first American company to challenge a domestic search warrant seeking data held outside the United States.

The Microsoft customer whose emails were sought told the company he was based in Ireland when he signed up for his account.

Other companies including IBM Corp(IBM.N), Amazon.com Inc(AMZN.O), Apple Inc(AAPL.O), Verizon Communications Inc(VZ.N) and Alphabet Inc‘s(GOOGL.O) Google filed court papers backing Microsoft.

The administration has the support of 35 states led by Vermont.

Reporting by Lawrence Hurley; Editing by Will Dunham