Microsoft Corporation Drops Lawsuit Over Gag Orders After DOJ Makes Changes

Microsoftefes / Pixabay

Microsoft Corporation (NASDAQ:MSFT) sued the government of the United States last year over restricting the right to inform customers, when officials are scanning their data on Microsoft servers. On Monday, Microsoft said it would drop the case. This change of heart came after the Justice Department issued new guidelines asking prosecutors to be more transparent when applying for a gag order and making it more difficult to get indefinite gag orders.

Gag orders – a threat to fundamental rights

Talking about the new policy of the Department of Justice (DOJ), Microsoft president and chief legal advisor, Brad Smith, said it “is an important step for both privacy and free expression. It is an unequivocal win for our customers and we’re pleased the DOJ has taken these steps to protect the constitutional rights of all Americans.”

Popularly known as gag orders, such requests from the agencies do not allow the tech companies to inform users about their mail being scanned. However, Deputy Attorney General, Rod J. Rosenstein, put an end to the imposition of gag orders last week. In most of the cases, the Deputy Attorney has also banned the indefinite gag orders that do not allow a company to inform about the mail search ever.

At the time of filing the lawsuit, Microsoft stated that in the time frame of 18 months, it received 2576 gag orders from the United States, and about two-thirds of them had the “indefinite demands for secrecy” i.e., no fixed end date.

The suit filed by Microsoft reasoned that the government’s actions were in violation of the Fourth Amendment, under which people and businesses have the right to know if the government is investigating or seizing their property. Along with the Fourth Amendment, gag orders also meddle with Microsoft’s First Amendment right to free speech.

More work needed – feels Microsoft

In a blog post, Smith said that these fundamental protections should not fade away simply because people have chosen to save their information in the cloud instead of desk drawers and cabinets. Clarifying Microsoft’s stance further, the executive said that they were not alone in their beliefs but that a host of other companies, business groups, civil liberties organizations and former law enforcement officials signed amicus briefs supporting the case.

Smith, however, noted that sometimes the government might need a secrecy order for legitimate reasons. For instance, gag orders are justified if disclosing the government’s request for the data could risk or harm an individual. Further, gag orders are understood, when the government’s investigation will fail if such orders are disclosed.

Applauding the decision by the Justice Department, Smith noted it “doesn’t mean we’re done with our work to improve the use of secrecy orders,” adding that the new policy does not solve all the problems with the Electronic Communications Privacy Act being the core issue, which the company wants Congress to consider and amend.

Microsoft, however, is still fighting its other lawsuit, over a request by the U.S. government to access email data on a server in Ireland.

On Monday, Microsoft shares closed up 0.03% at $78.83. Year to date, the stock is up almost 27%, while in the last three-months, it is up almost 7%.

About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at