Thank you, Chairman Graham, Ranking Member Whitehouse, Senator Hatch, it's my pleasure to be here on behalf of Microsoft this afternoon. Certainly, before I say anything else, I want to echo your thoughts, and the views of so many Americans, in expressing our condolences and our concerns to Mr. McGuinness and all of the people of the United Kingdom. Today's hearing gives us an opportunity to address related issues, the important need for law enforcement to work across borders to obtain information it needs, while avoiding conflicts with other countries laws. The issue is not new, governments have long turned to Mutual Legal Assistance Treaties, or MLATs, but the world has clearly changed. As a company responsible for storing and safeguarding citizens' most private information in the cloud, we long recognized that new laws are needed. I first want to underscore Microsoft's appreciation for last year's work to negotiate a bilateral agreement between the United States and the United Kingdom. This agreement is a positive step forward which we support. Second, I want to thank the Department of Justice for proposing a new framework for U.S. law. While we have important concerns with some aspects of this proposal, we have long urged the department to consider new legislation, and this is a welcomed step. Since Microsoft filed this lawsuit in 2013, we've stated repeatedly that new law is needed. We recognize that criminals sometimes use technology across borders, and that MLATs and legal principles designed for the 20th century simply have not kept pace. Unfortunately, while the use of extraterritorial search warrants in the short run have sometimes helped law enforcement, they have created their own set of problems. First, they've led the conflicts between laws, even among friends and allies, as countries seek to protect the privacy of their citizens. These conflicts put technology companies in impossible position of deciding whose law they will break. Second, the use of extraterritorial warrants undermines foreign confidence in American technology. They drive foreign customers to foreign products and put American jobs at risks. These concerns led to our lawsuit, objecting to extraterritorial search warrants to obtain information stored in our data center in Ireland. Last year's court of appeals decision, supporting Microsoft's position, makes clear that now is the time for congress to act. While important details remain, the DOJ's proposal opens the door to a new and constructive discussion. Importantly, the department proposes a new legal framework that would enable companies that have information in the United States responsive to a foreign warrant to turn that information over directly to a foreign government in specific, appropriate circumstances. It would do so in a way that both complies with foreign and U.S law, and in a manner, that protects privacy and civil liberties. Ultimately, we have one fundamental concern with the DOJ's proposal, a concern that can be addressed readily. The DOJ proposes a new standard for allied and friendly governments to obtain information located in the United States in a manner that respects U.S law, namely through this new framework, but the DOJ would not follow that framework itself. Instead, it wants to revert to extraterritorial search warrants despite all the problems these create. Put simply, this isn't going to work. One year from tomorrow, on May 25, 2018, the European General Data Protection Regulation will take effect. On that day, technology companies that comply with the DOJ'S proposed extraterritorial warrants for information stored in Europe are almost certain to violate European law. In fact, they will be subject to a fine of up to four percent of worldwide revenue. Instead the U.S. needs to consider the same framework for itself, and demonstrate respect for borders and reciprocity with allied and friendly nations. This isn't simple, but it's achievable. We have a year and a day to solve this. We'll need important work by the subcommittee, it will need to build on the DOJ proposal, and it will need to build on the sustained work of senators Hatch and Coons. It will also require a broad dialogue. Speaking for myself, and considering my colleagues across the tech sector, I believe we're willing and able to help. Thank you.
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