Microsoft’s New Plan for Fighting Government Surveillance: Store Data in Germany

CEO Satya Nadella in April 2014.

Photo by Justin Sullivan/Getty Images

Microsoft announced on Wednesday that it will open new data centers in Germany in late 2016. For a company with such extensive cloud infrastructure, that might not seem so unusual, but these data centers are part of an ongoing effort to reassure European clients who worry that using United States–based tech services means subjecting themselves to U.S. government surveillance. T-Systems, a subsidiary of Deutsche Telekom, will be the “data trustee” of the centers, and Microsoft employees won’t have access to any of the data stored there, except with T-Systems’ approval.

Germany has strong privacy laws that Microsoft is hoping will protect the centers in case a U.S. government agency demands data from the company. The Financial Times reports that Microsoft customers who want to use the German data centers specifically will have to pay an additional fee. Microsoft CEO Satya Nadella said in a statement that the new data centers will “offer customers choice and trust in how their data is handled and where it is stored.”

Microsoft and other U.S.-based tech companies have been scrambling to reassure European clients ever since Edward Snowden’s revelations about the National Security Agency in 2013. And more recently, the European Union struck down the “Safe Harbor” data-transfer pact that allowed tech companies to move data from European to U.S. data centers. Negotiations on a new agreement are ongoing, and Microsoft’s new German data centers may influence the discussion.

Paul Miller of Forrester Research told the Financial Times that it is unclear how well Microsoft’s new approach will stand up. “As with all new legal approaches, we don’t know it is watertight until it is challenged in court,” he said.

On Tuesday, Microsoft also announced that it will open data centers in the United Kingdom in late 2016 so local clients can use in-country cloud services. “Local data centers will help meet … demand, especially for those organizations looking for solutions delivered from data centers based in the UK,” said Michel Van der Bel, the area vice president and general manager of Microsoft UK. It’s a subtle way of saying that enterprise customers know the privacy laws in each country and want to be able to choose where they keep their data. Microsoft also noted that its data centers in Ireland and the Netherlands are now operational.