Microsoft case ruling ‘going to have a huge impact’

Large multinationals could move at least part of their operations out of Ireland as a result of the car crash-like fallout that could ensue should US authorities force Microsoft to hand over data stored in Irish data centres.

A leading security consultant has said the ongoing legal dispute between US authorities and the world’s second largest company, in which the Irish Government and European Commission are also involved, is going to have a huge impact and could have have widespread ramifications for large multinationals who have chosen Ireland to store their customers’ data.

BT Ireland security consultant, Gareth Price said that should the request made by a New York judge not be overturned, it would undermine consumers’ confidence in companies’ ability to protect their privacy.

“I think it’s going to have a huge impact, I’m glad Microsoft are fighting their corner because they’ve obviously seen what effect it will have if suddenly Ireland is not in effective control over the data that’s in it,” said Mr Price.

“I’m sure initially, a bit like a car crash, there will be a big flurry of activity and we may get used to it but I think it would be a big problem for any company that wants to keep its data ... maybe a flight to Germany for all these companies is a possibility.

“I’d say it has to have an impact, suddenly your data can be requested and you’re providing these guarantees which you can’t back up anymore.

“If it’s been ruled in this one case you’d want to be looking for a different place to put your data,” he said.

Germany could be an attractive country to relocate to due to its strict data protection policy over and above the rest of the EU, he said.

Last week, the Government asked the EU Commission to check if EU data protection laws would be breached if US authorities seized Irish-held data on foot of a US court order.

The software giant claims that if it is forced to hand over data as a result of the request, made in connection to a narcotics investigation, it would erode consumer confidence in its ability to protect private data and would jeopardise its entire cloud-computing plans worldwide.