In 1986 Congress passed the Stored Communications Act (SCA) to control telephone records long before the Internet we know today, but the SCA is the main law that Internet companies rely to protect users’ content and in 1986 in passing the SCA “Congress focused on providing basic safeguards for the privacy of domestic users.” Nonetheless in 2014 the New York a trial court found Microsoft in contempt for failing to produce emails of an alleged criminal stored on serves in Ireland which Microsoft refused to do given Irish law.
Ultimately on July 14, 2016 the 2nd Circuit reversed the trial court and ruled in Microsoft v. United States of America that:
…§2703 of the Stored Communications Act does not authorize courts to issue and enforce against U.S.‐based service providers warrants for the seizure of customer e‐mail content that is stored exclusively on foreign servers.
The Washington Post reported that Brad Smith (Microsoft President and Chief Legal Officer) said in an email:
The decision is important for three reasons: it ensures that people’s privacy rights are protected by the laws of their own countries; it helps ensure that the legal protections of the physical world apply in the digital domain; and it paves the way for better solutions to address both privacy and law enforcement needs,…
There is no telling if Congress won’t change the SCA or how the Supreme Court may view this dispute if the Justice Department decides to appeal.