Here’s why Microsoft is suing the feds – MarketWatch

REDMOND, Wash. — Companies often try to steer clear of conflicts with the government. But Microsoft Corp.

MSFT, +1.79%

is picking fights with the government.

In the past three years, the software giant has sued the federal government four times, challenging law-enforcement efforts to secretly search customer data on servers at Microsoft’s data centers in the U.S. and elsewhere. Microsoft, like several other tech companies, often receives federal demands for customer information, such as emails, that include gag orders barring the company from telling those customers the government looked at their data.

Microsoft’s most recent suit, filed in April against the Justice Department, contests the constitutionality of preventing tech firms from telling customers when federal agents have examined their digital files.

Like Apple Inc.

AAPL, +0.77%

and Alphabet Inc.,

GOOGL, +1.49%

which have challenged the government over similar issues, Microsoft has been hailed by privacy activists and civil libertarians worried about government overreach. The company has also faced criticism from law enforcement that its actions could hamper criminal investigations.

Microsoft’s president and chief legal officer, Brad Smith, is the architect of the company’s strategy to challenge the government. Smith, who says he recognizes the importance of government investigations, believes that indefinite gag orders violate Microsoft’s First Amendment right to inform customers about searches of their files, and that secret searches violate the Fourth Amendment requirement that the government give notice to people when their property is being searched or seized.

The Wall Street Journal talked with Smith in his office at Microsoft headquarters here about the company’s strategy, and its attempt to balance concerns about public safety with the desire to protect customer privacy. Edited excerpts follow.

What’s at stake?

Question: Microsoft has sued the federal government four times in the past three years. Why?

Smith: These suits have all involved situations where we’ve felt that the company’s business and the interests of our customers were at stake around security and privacy. They also involved important issues of principle, including the right of people to know what the government is doing in certain circumstances.

Tell me about the decision-making process at Microsoft to file the suits.

Before filing the lawsuit [in April], I shared the thinking with three groups of people. First and foremost, Satya Nadella, our CEO; our senior leadership team that meets every Friday for half a day; and our board of directors. I made sure people knew what our thinking was, what we were planning to do, and welcomed feedback. In each case, everybody expressed a substantial level of comfort and understanding with what we were doing.

It’s important for us to use a blog to communicate externally and internally. Our employees are going to find themselves needing to make similar decisions in the future, or explaining these decisions to our stakeholders, including our customers. We [also] need to get our rationale down to 122 characters so it can be put in a tweet that can be retweeted. The very last step is sitting down and asking, “What is the heart and soul of what we’re trying to communicate? How do we get this down to 122 characters so we can really explain it to the world?”

Did anyone in the leadership say, “This is a step too far?”

There wasn’t a voice to that effect. In the most recent case, we concluded that we were basically being left with no choice. One of the challenges with these secrecy orders is that they were being pursued across the country by 93 different U.S. attorney’s offices that, to a certain degree, make decisions in a fragmented way. So we were constantly trying to hammer things out with office after office and, not surprisingly when you have 93 different offices, eventually you start to encounter situations where things break down.

These are issues we had tried to raise with the Justice Department in Washington, D.C., over the last few years. They work in an environment that has so many competing priorities that many days we would find that our concerns just didn’t make it high enough on their list for effective action to be taken.

Consumer reaction

Have you polled consumers on this issue?

We definitely have. We’ve done I would say on average one or two consumer-oriented polls each year over the last few years, since these issues first arose. And if there is a constant point of almost universal consensus among the American public, it’s this: People feel fundamentally comfortable with the balance of governmental power and individual rights that has existed in the U.S. since the country was founded and information was put on paper. And what people want is to see information that is stored digitally in the cloud get the same kind of protection as information that is written down and stored on paper.

Some police groups came out against Microsoft. Are there dangers from a public perception standpoint?

One needs to be prepared to accept some level of risk to accomplish anything of significance. It behooves us to communicate carefully. It’s always important for us to acknowledge that some of these issues involve competing values that are each important in their own right. This isn’t a battle of good versus evil as much as it involves thinking through how we as a society move to the cloud in a way that keeps our traditional values intact.

Typically, ultimately, some middle ground needs to emerge. While debates can start with two opposing people, they typically end with a handshake.

How did Microsoft work with law enforcement after the Paris attacks?

Even while we fervently believe in privacy and are prepared to go to court to disagree with our own government, we do recognize that our industry has not only a role but a responsibility to help keep the public safe.

In the wake of the Paris attacks last November, we did receive 14 lawful orders from the police in Paris and Brussels. And in all 14, we concluded they were lawful orders. We concluded that we had the information the government was requesting and could turn it over. And, in fact, we did turn it over with an average turnaround time of under 30 minutes. There are days when people’s lives are at stake. And on those days it is our job to work hard to serve the public in this broad way.

Jay Greene is a reporter for The Wall Street Journal based in Seattle. He can be reached at

The article “Why Microsoft is suing the feds over issues of privacy and security” first appeared on

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