A federal judge ruled Thursday that Microsoft must hand over e-mails stored on an overseas server to US authorities. The case gives the Obama administration approval to reach into servers abroad.

"It is a question of control, not a question of the location of that information," US District Judge Loretta Preska ruled in a closely followed legal flap. The bench order from the New York judge was stayed pending appeal.

The judge sided with the Obama Administration claims that any company with operations in the United States must comply with valid warrants for data, even if the content is stored overseas—in this case Dublin, Ireland. It's a position Microsoft and companies like Apple contended was wrong, arguing that the enforcement of US law stops at the border.

A magistrate judge had already sided with the government's position, ruling in April that "the basic principle that an entity lawfully obligated to produce information must do so regardless of the location of that information." Microsoft appealed to a federal judge, and Preska ruled from the bench after a two-hour hearing Thursday.

Microsoft said in court filings that "Congress has not authorized the issuance of warrants that reach outside US territory. The government cannot seek and a court cannot issue a warrant allowing federal agents to break down the doors of Microsoft’s Dublin facility."

The Redmond, Washington-based company said its consumer trust is low in the wake of the Edward Snowden revelations. Microsoft told Judge Preska in a filing that the "government's position in this case further erodes that trust and will ultimately erode the leadership of US technologies in the global market."

Companies like Apple, AT&T, Cisco, and Verizon agree. Verizon said (PDF) that a decision favoring the US would produce "dramatic conflict with foreign data protection laws." Apple and Cisco said (PDF) that the tech sector is put "at risk" of being sanctioned by foreign governments and that the US should seek cooperation with foreign nations via treaties, a position the US said is not practical.

The Justice Department said global jurisdiction is necessary in an age when "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."

The e-mail the US authorities are seeking from Microsoft concerns a drug-trafficking investigation. Microsoft often stores e-mail on servers closest to the account holder.

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