Microsoft is currently in the middle of a legal campaign that sees a US court trying to force the software giant to turn over email that is stored on servers housed in Ireland. The catch for Microsoft is that to comply with the US law and court order, it will have to break European Union law. EU law says that only local courts can make the decision to release data stored on local servers.
The court order issued by the US court requires Microsoft to turn over any data it controls, regardless of where that data is stored. The crux of the argument form the US court is that even though the data is physically stored outside the US, the company that controls the data is in the US and therefore must obey US law.
In the end Microsoft is in a bad place, turning the data over to the US court will violate EU law and not giving it to the US court will violate law in the US. Microsoft will likely appeal the ruling so it's not clear yet if it will have to turn the data over.
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