European Web Hosts Gain Advantage with American Court Ruling

Mon, 12th September 2016, 15:26

Last year, President Obama angered some officials in Europe when he suggested that the European Union’s investigations into companies like Google, AWS, and Microsoft were "commercially driven." Obama claimed that European "service providers who can’t compete with ours, are essentially trying to set up some roadblocks for our companies to operate effectively there." While the EU officials did a collective Le gasp, pretty much everyone else is aware that American companies have long enjoyed lower taxes and less bureaucracy than their European counterparts.

So, with an estimated 61% of European businesses seeking to gain a competitive edge using digital marketing such as e Commerce, it’s little wonder many are seeking noticeably less expensive solutions ‘across the pond’. While the EU only has itself to blame, a recent US court decision may have handed EU based web hosting companies looking for a break an advantageous marketing tool.

While privacy is not a topic covered in the American Constitution, it has been implied through the centuries that, in general, Americans have a right to privacy. However, in the expansion of the digital age, privacy has become a highly heated debate in the U.S. No one knows where to draw a line in the sand between allowing American citizens their rights to privacy in data, and allowing Big Brother unlimited access to that data.

Recently, Microsoft won their right to privacy in a landmark trial through a panel of second circuit judges. Microsoft originally was subpoenaed in a criminal investigation to bring forth a user’s personal data, which Microsoft wouldn’t do because it was stored in one of their data centers overseas. Microsoft, of course, was charged with contempt of court after they refused to produce the requested user data. Never the kind of company you expect to walk away, Microsoft fought the decision and won. The second circuit judiciaries have made it clear through their final ruling that U.S. laws (like subpoenas and search warrants) only apply within the U.S. itself. Even if a company is based in the U.S., its overseas data cannot be touched without going through the hosting country's judiciary system to obtain warrants/subpoenas.

EFF’s senior staff attorney Lee Tien stated:

"This is a groundbreaking decision that helps to protect privacy rights around the world. The court concluded that under the Stored Communications Act the government cannot use a U.S. search warrant to obtain a customer's email stored on servers outside the country. In our amicus brief supporting Microsoft in this case, we urged the court to reject the government's argument that the search warrant it obtained for email contents was like a subpoena that would require Microsoft to turn over information, regardless of where it was stored. The court recognized the vital privacy protections under the SCA, and correctly ruled that the government cannot use a U.S. search warrant to force Internet service providers to reach email stored outside the U.S."

How this decision will affect future American digital rights cases in the future remains to be seen. However, it does seem to make one factor very clear: The American government is telling its officials “hands off” data that is stored overseas, even if that data is stored by an American company. Of course, this may be different in cases involving U.S. natives with data stored overseas, but Europeans at least can rest assured that their data is safe from being spied on by the U.S., even if it is stored in Europe by an American company. Of course, Europeans making use of European web hosting companies on native soil hold the biggest advantage here still, but this case does show that EU natives will have their privacy rights respected by the American government, even if they do choose to go with an American web host that hosts their data on European soil.

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