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Microsoft Sues Gov't for Gag Orders on Data Requests

Balancing privacy issues and law enforcement needs is not that easy. It appears that the clash is taking the shape of a chain reaction, being fueled most recently by Microsoft Corporation MSFT.

The company has sued the Justice Department on Thursday to stop authorities from viewing user email or online files without user’s knowledge.

In the suit filed in the US District Court of Seattle, the company referred to the  government’s attempts to bar tech companies from letting customers know when their data has been accessed by federal agents, as unconstitutional.

According to the company, the Justice Department is taking undue advantage of the decades-old Electronic Communications Privacy Act of 1986, violating a customer’s privacy rights under the veil of security.  

Microsoft claims that in the last 18 months, it has received 5624 secrecy orders, nearly half or 2576 with gag orders attached. A gag order provision prevents companies from informing people that the government has a warrant to access their emails or online files.

Microsoft’s president and chief legal officer Brad Smith commented, "We appreciate that there are times when secrecy around a government warrant is needed. But based on the many secrecy orders we have received, we question whether these orders are grounded in specific facts that truly demand secrecy. To the contrary, it appears that the issuance of secrecy orders has become too routine."

Other tech companies like Box, Inc. BOX, Apple Inc. AAPL and Yahoo! Inc. YHOO have supported Microsoft’s suit with their individual statements of solidarity.

Microsoft’s legal challenge follows a high-voltage legal confrontation between Apple and FBI over demands for access to an iPhone used by the terrorist who killed 14 in San Bernardino, CA. The fight ended with the agency dropping the case after managing to crack the phone with the help of a third party.

Tech companies are facing a tough time dealing with privacy issues, especially in the cloud era when investigators can bypass individuals and press host companies for information.

Currently, Microsoft is a Zacks Rank #3 (Hold) stock.

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