Can US warrants reach into servers located overseas? Microsoft says no

In a case that could have big implications for privacy rights and U.S. tech companies, Microsoft(s msft) is challenging the federal government’s ability to use search warrants to obtain customer emails hosted on a server in Ireland.

According to Microsoft, the decision by a magistrate judge in December to wrongfully extends U.S. law enforcement power overseas. The software giant says the magistrate’s ruling is like granting a search warrant “allowing federal agents to break down the doors of Microsoft’s Dublin facilities.”

Last week, the company asked a federal court in New York to scrub the part of the warrant, related to a drug-trafficking investigation, that allows the government to carry out a search on foreign territory. In the filing, reported by the Washington Post, Microsoft suggested that the U.S. should instead rely on its a legal assistance treaty with Ireland to retrieve the emails located in Dublin.

The magistrate judge has so far rejected Microsoft’s arguments about overseas searches as “deceptively” simple, and relied instead on a technical argument that a search did not really take place overseas since the content of the emails was only read in the U.S. The judge also rejected the idea of relying on a treaty with Ireland, suggesting to do so would be “burdensome.”

For Microsoft, more is at stake than just legal principles. The company is trying to reassure overseas customers who are skittish about U.S. surveillance practices that it can protect their privacy. (Microsoft, Google(s goog) and others will also be addressing these issues at Gigaom’s Structure event in San Francisco next week).

Verizon(s vz) is also supporting Microsoft’s effort to curtail the warrant. In a friend-of-the-court brief, the telecom giant warned that overly broad search rules in the U.S. could cost companies there billions in lost revenue, and pointed to European backlash over the discovery that the Belgium-based banking consortium SWIFT had been illegally sharing customer data with the U.S.

The Justice Department, for its part, is warning that changing the search warrant rules could permit criminals to thwart investigations by falsely declaring themselves to be residents of Europe.

A ruling is likely to come in coming weeks.

Microsoft’s challenge over the Dublin emails comes one month after the company won an unrelated court victory when it defeated the FBI’s attempt to use a gag order to prevent Microsoft from disclosing an investigation to an Office 365 customer.