US Action Against Microsoft Could Ruin The Fourth Industrial Revolution

Throughout human history, new technologies have been delivering us from inconveniences great and small. Right now, one of the most significant new technologies is cloud computing, and it too has the potential to rewrite history as we’ve known it.

But only, of course, if politics and policy move fast enough to keep up. If we get serious about it, cloud computing could play a monumental role in what some are already calling the “Fourth Industrial Revolution (News - Alert).” Unfortunately, these giant leaps forward are starting to look more like baby steps backward in the current political landscape.

Here’s a look at how two landmark legal cases involving Google and Microsoft (News - Alert) could disrupt the future of the cloud.

Regulators Make Their Cases

You’re likely already familiar with at least the Cliffs Notes version of the European Union’s decision against Google (News - Alert), which determined that the tech giant had been benefiting unfairly from its effective monopoly on Internet searches.

It turns out the EU is more serious about busting monopolies and trusts than the U.S. has been in quite some time. Regulators in the EU slapped Google with an unprecedented fine of $2.7 billion for manipulating search results to favor its own products and services. The watchdog group wants Google to provide “equal treatment” to their competitors.

Society chose to grant Google power as a gatekeeper to information on the merits of their search engine algorithm being demonstrably better than the competition. But that doesn’t mean the entire world needs to play by their rules.

Nevertheless, while the EU’s action against Google is going to substantially impact how Google and parent company Alphabet operate in Europe — and set a precedent for years to come — it might be the United States’ recent action against Microsoft that deals the greatest blow to tech’s stewardship of our economic futures.

Microsoft’s Line in the Sand

Believe it or not, Microsoft’s current tiff with law enforcement will likely be far more consequential than Google’s. It involves the ownership of data, law enforcement jurisdictions and the degree to which international borders apply to data held on foreign soil.

Sound like a complicated can of worms? It is. Here’s a brief summary:

• A judge in New York State decided one of his cases hinged upon emails stored on Microsoft servers physically located in Ireland. Microsoft has refused to turn them over.

• Like most big tech companies, Microsoft usually cooperates in these types of situations — but in this case, the company is refusing because of how the request was made — not because it was made.

• Microsoft argues U.S. authorities have heretofore been required to work with the foreign government in question and request permission for access jointly. Translation: there are privacy concerns here, due diligence concerns and the “mission creep” of government institutions growing their footprints ever larger in the name of national security.

• Parties in the U.S. unsympathetic to Microsoft’s stance argue that, because Microsoft is a U.S.-based company, the justice system has every right to make a demand of this kind without working with the Irish government.

• This position ignores the fact that if the evidence was written down on paper, instead of encoded digitally, there would be absolutely no question these two governments must work together and abide by due process.

• The legal entities in play here wish to set the precedent that “digital evidence” must be handled differently — and the involved parties treated differently — than evidence of any other kind. Digital information is still very much a legislative and political gray area.

It would be pretty difficult to downplay how significant this situation is. Nearly everyone with Internet access has shared a considerable amount of our personal and sensitive information, our correspondence and our personal records onto digital devices and servers. We expect a minimum level of privacy, but the framers of the Constitution could never have foreseen the need to directly address whether digital property falls under protections granted with phrases like “right to privacy” and “protection from unreasonable search and seizure.”

But now, “the state” — in this case a judge in New York — wishes to nearly destroy the entire canon of United States privacy laws simply because he doesn’t understand how modern technology works.

This brings us, finally, to the dangerous idea that the Google case and the Microsoft case are comparable, interchangeable or speak to the same issues. They do not, and believing so is dangerous.

The Google case, in this writer’s opinion, is pretty straightforward. Google has quite nearly made their search engine a public utility. It’s an incredible product that has made our lives significantly easier. But no single company should be allowed the power Google has now assumed; they literally write the rules about how we find information online, and can easily leverage those rules to favor their products and exclude competing offerings.

It’s an antitrust case, plain and simple. It rests on legally and morally sound footing.

The Microsoft case is different, though. If cloud computing — the storage and retrieval of digital information across multiple locations — is treated differently than the storage and retrieval of physical records, we’re all in a hell of a lot of trouble. The implication here is that, since there’s no real legal precedent in a case like this, the parties whose emails are being demanded are effectively guilty until proven innocent.

Due diligence, including the steps required to secure a search warrant, absolutely must apply to cases concerning “digital evidence.” If that’s not so, it means everything about our digital lives, including the right to privacy noted in our Constitution, can be made public if a judge deems it expedient for managing his caseload. Microsoft’s Brad Smith explained the case as succinctly as anybody by asking a simple question:

“Should people be governed by the laws of their own country?”

If the answer is “yes,” the privacy of the emails in question cannot be compromised until the legal system has obtained explicit permission in the form of a search warrant and with permission from the foreign government in question.

Microsoft and the Fourth Industrial Revolution, Explained

Now. Why’s this all significant? Why is the sky — or perhaps the clouds — falling?

The first three industrial revolutions concerned mechanized manufacturing, rapid industrialization and computers/electronics, respectively. These revolutions delivered interchangeable parts and technologies and processes, which helped us do more with less and even made it possible to estimate equipment lifecycle costs in a formulaic way.

But the fourth industrial revolution is all about data, including how we use it and how it can help democratize just about everything else we do.

Moreover, data now lives in everything: our personal computers, phones, cars, construction equipment and even our refrigerators contain data and use an Internet connection almost perpetually. These devices, including the data they contain or help create, are some of America’s most important exports. It’s pretty important that the world’s nations understand that buying American products, even and perhaps especially digital ones, come with certain guarantees of privacy. It’s what the land of the free is ostensibly all about.

This is also a two-way street, for reasons that should be obvious; if the power structure in America can demand or seize data held in other countries about their citizens, any other country can make the same demands for data concerning American citizens.

In process here is an unraveling of the very legal framework that has held together civil society and international cooperation for hundreds of years. Digital evidence is no different from any other kind, and we have as much right to expect our emails will remain private as we do to expect anything in our homes to not be seized without good cause and a warrant.

The outcome in this case could set back this very real industrial revolution — a movement which should be helping ease international relations and improve the integrity of our digital lives — not make them worse.