Microsoft will allow foreign customers to have their personal data stored on servers outside the U.S., breaking ranks with other big technology groups that until now have shown a united front in response to the American surveillance scandal.
Brad Smith, general counsel of Microsoft, said that although many tech companies were opposed to the idea, it had become necessary following leaks that showed the U.S. National Security Agency had been monitoring the data of foreign citizens from Brazil to across the EU.
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"People should have the ability to know whether their data are being subjected to the laws and access of governments in some other country and should have the ability to make an informed choice of where their data resides," he told the FT.
Mr Smith added that customers could choose where to store their data from a variety of existing Microsoft data centers. For example, a European client could choose to have their data stored in the group's Irish data center.
The scandal over the NSA's illicit internet surveillance and the bulk collection of phone records has caused tensions between the U.S. and even some of its closest allies. The revelations sparked a global backlash, from calls for tighter privacy rules in Europe to a draft law in Brazil that would require all data about citizens to be held inside the country. Internet companies argue that this would balkanise the internet, turning it into a patchwork of national or regional systems.
Microsoft's gesture was immediately welcomed by privacy advocates, though it looked set to open a rift between the tech companies as they struggle to deal with the damage from the surveillance scandal.
"It's incredibly positive," said Jeff Chester, a U.S. privacy campaigner. "If they're really making a public commitment to store [data] locally then they will be breaking with the rest of the industry."
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Some critics of the idea have questioned whether such a move would be effective in putting the personal data of non-Americans outside the reach of the NSA, since U.S. tech companies have to hand over information about specific users when ordered to by a secret U.S. court, regardless of where it is held.
However, keeping the information off U.S. soil and under local data protection rules should make it harder for the NSA to tap into illicitly, Mr. Chester said. "If the data are not being transported, then it does stop that kind of access."