Microsoft to Let Foreign Customers Store Data Overseas

Microsoft Corp. (MSFT) will allow overseas customers to have their personal data stored outside the U.S., a response to concerns about allegations of U.S. government spying, Microsoft General Counsel Brad Smith said yesterday.

Smith told the Financial Times in an interview at the World Economic Forum in Davos, Switzerland, that while other companies oppose the idea, it’s become necessary following leaks about the U.S. National Security Agency’s data-collection programs. A spokeswoman at Microsoft confirmed his comments.

The move comes as technology companies from Microsoft to Google Inc. (GOOG) grapple with customer concerns after revelations by former NSA contractor Edward Snowden. Details about the extent of NSA spying have “created a crisis of confidence” when it comes to users trusting U.S. Internet companies and undermines potential economic growth, Kevin Bankston, policy director for the Washington-based Open Technology Institute, told reporters on a conference call last week.

In a panel discussion earlier yesterday in Davos, Smith told the audience that Microsoft doesn’t turn over information stored in its data centers and requires requests made by governments to go through the due process of law.

Photographer: Andrew Harrer/Bloomberg

Microsoft General Counsel Brad Smith said yesterday that Microsoft Corp. will allow overseas customers to have their personal data stored outside the U.S. Close

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Photographer: Andrew Harrer/Bloomberg

Microsoft General Counsel Brad Smith said yesterday that Microsoft Corp. will allow overseas customers to have their personal data stored outside the U.S.

“We have never turned over to any government any information that belongs to another business, another government or an NGO,” said Smith. “It is not our right, no one elected us, to simply decide to turn over someone’s information.”

U.S. Servers

At an appearance in Davos today, Google Chairman Eric Schmidt said that even if Microsoft moved customer data overseas, the information might still be subject to U.S. surveillance.

“My understanding of U.S. law is if you have a U.S. server in another country, the U.S. law still allows that to be subject to the FISA rules,” he said, referring to the Foreign Intelligence Surveillance Court, the panel of judges that decides on requests for access to data. “I would ask Microsoft. Perhaps they figured a way around that.”

Schmidt said most people want the government to protect them, and at the same time they don’t want to give up personal freedoms.

“We are having the proper debate,” he said.

A spokeswoman for Microsoft declined to comment on Schmidt’s remarks today.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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