The Obama administration on Wednesday will argue to a US appeals court that companies operating in the US must comply with valid warrants for data—even if that data is stored on overseas servers.

Much of the tech sector, from Amazon and Microsoft to Verizon, oppose the US government's position in the closely watched case. These companies and a slew of others maintain that the enforcement of US law stops at the border. They say the global community is already skittish about trusting US-based tech companies in the wake of the Edward Snowden leaks. So a ruling siding with the Obama administration would fuel that mistrust, conflict with foreign data protection laws, and place the tech sector at risk of foreign government sanctions, the companies said.

Further Reading Microsoft ordered to give US customer e-mails stored abroad writing in a court brief that "The government cannot seek and a court cannot issue a warrant allowing federal agents to break down the doors of Microsoft’s Dublin facility."

Microsoft says is usually stores e-mail on servers in proximity to an account holder.

Federal authorities say the case is a no-brainer: Microsoft is in the US, has control over the servers, and should cough up the data. The government has maintained that worldwide jurisdiction to the world's servers is critical because "electronic communications are used extensively by criminals of all types in the United States and abroad, from fraudsters to hackers to drug dealers, in furtherance of violations of US law."

So far, the lower courts are on Obama's side. "It is a question of control, not a question of the location of that information," US District Judge Loretta Preska ruled last year.

The ruling was stayed pending appeal.

The government points out that the US courts have said banks' business records held overseas are ripe for federal taking. But Microsoft says business records and e-mail are not the same.

"A bank can be compelled to produce the transaction records from a foreign branch, but not the contents of a customer’s safe-deposit box kept there," Microsoft said. "A customer's e-mails are similarly private and secure and not subject to importation."

Even if the Obama administration were to lose the case, the US has other legal options available. The senior counsel for the Irish Supreme Court said a US-Ireland "Mutual Legal Assistance Treaty" would be the "efficient" (PDF) legal avenue for the US to take in its quest for the data. The Ireland government said it would consider the US government's request for the data under the treaty "as expeditiously as possible."