The Supreme Court will hear a digital privacy case this month against Microsoft (MSFT) that could attract international attention and reignite fears that the U.S. government is harnessing tech giants to spy on the rest of the world.

The case, U.S. v. Microsoft, will determine whether the U.S. government can force tech companies to hand over customers’ emails even if they’re stored on foreign servers.

‘Foreign countries may be troubled’

This conflict has captured the attention of Congress, where just this week a group of bipartisan lawmakers introduced legislation that would clarify the rules on cross-border data searches. If that legislation passes, the case against Microsoft may be rendered moot — if not, the Supreme Court will be forced to weigh in on a thorny topic that could pose negative consequences for America’s image abroad.

“Foreign countries may be troubled by the idea that U.S. law enforcement can search the files of any company with a U.S. office, even if those files are located overseas,” says Matthew Tokson, an associate professor at University of Utah’s College of Law and an expert on digital privacy.

“This is especially sensitive territory,” he added, in an email to Yahoo Finance, “because U.S. surveillance of foreigners for national security purposes has already caused foreign countries to be wary of U.S.-based tech companies, hurting U.S. businesses.”

Or, as another associate law professor, Jennifer Daskal of American University’s Washington College of Law, put it, “There’s an ongoing concern about the scope of U.S. surveillance.”

Digital privacy and a 32-year-old law

This dispute involves a 1986 law that many privacy advocates argue desperately needs updating. Under the Stored Communications Act (SCA), law enforcement officers in the U.S. can get probable cause–based warrants to force service providers to hand over so-called stored electronic communications.

In 2013, the government used this then-27-year-old law as justification to obtain a warrant that would have required Microsoft to hand over information for an email account allegedly being used for drug trafficking. However, Microsoft stored the targeted emails overseas, in Ireland, so the tech giant refused to hand them over. In a Supreme Court brief, the company noted that the U.S. “has never suggested that the customer is a citizen or resident of the United States.”

While a district court held Microsoft in contempt for rejecting the government’s request, the U.S. Court of Appeals for the Second Circuit unanimously sided with the tech company on the grounds that the law doesn’t specify that its warrant provisions can be applied overseas. Microsoft noted in a brief that, when Congress passed the law, it could “have scarcely imagined … a world where a technician in Redmond, Washington, could access a customer’s private emails stored clear across the globe.”

Indeed, the SCA was enacted three years before the World Wide Web was born. In the current interconnected world, companies like Microsoft often “migrate” email content and other data to foreign data centers close to users’ reported locations to reduce “network latency,” i.e., delays.

In asking the Supreme Court to reverse the Second Circuit decision, the U.S. government argued that its requests for those emails shouldn’t count as a so-called extraterritorial application of the SCA. That’s because Microsoft would be disclosing the emails in the United States, even though it’s storing them abroad, the U.S. contends.

“[T]he warrant requires disclosure in the United States of information the provider can access domestically with the click of a computer mouse,” according to the government.

The U.S. contends these warrants serve as a valuable tool to prevent terrorist attacks as well as to investigate other serious crimes such as fraud, drug trafficking, sex trafficking and child pornography.

Tech companies step up to protect privacy

Microsoft is not the only tech company to take issue with the government’s contention that it has a right to obtain warrants for overseas data that can be accessed in the U.S.

Last month, some of the nation’s biggest tech companies — including Amazon (AMZN), Facebook (FB), Google (GOOG, GOOGL) and Yahoo Finance parent Verizon (VZ), among others — filed an amicus brief asking the high court to side with Microsoft.

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