WASHINGTON, March 21 (Reuters) - A federal spending bill released late on Wednesday included bipartisan legislation that would amend a decades-old privacy law to clarify that a U.S. warrant seeking data stored overseas is valid in certain circumstances.
The provision, known as the Cloud Act, seeks to resolve a long-running dispute between Microsoft Corp and other email providers and the U.S. Justice Department over whether a warrant can compel companies to hand over emails stored on foreign servers.
If adopted, the measure could make a case argued before the U.S. Supreme Court last month moot that arose after Microsoft balked at handing over a criminal suspects emails stored in company servers in Ireland.
Microsoft, which along with other tech firms increasingly offers cloud computing services in which data is stored remotely, won a victory before a federal appeals court in 2016.
That ruling was appealed by President Donald Trump's administration to the Supreme Court, where several justices expressed reluctance to decide the case and instead urged Congress to pass a law updating the 1986 Stored Communications Act.
Current agreements that allow law enforcement access to data stored overseas, known as mutual legal assistance treaties, involve a formal diplomatic request for data and require the host country to obtain a warrant on behalf of the requesting country. That can often take several months and are considered burdensome by law enforcement.
The Cloud Act would allow a means to bypass the treaty process for U.S. authorities and approved partner countries that abide by certain customer privacy standards. It would let U.S. judges issue warrants while giving companies an avenue to object if the request conflicts with foreign law.
It is supported by Microsoft, other major technology companies, the Trump administration and the British government, but opposed by civil liberties groups who say it lacks sufficient privacy protections.
Republican Senator Orrin Hatch, the lead author of the Cloud Act, said in a statement on Wednesday that it would "create a clear, balanced framework for law enforcement to access data stored in other countries while at the same time encouraging our allies to strengthen their domestic privacy laws."
The spending bill must be passed by both the House of Representatives and Senate by a Friday midnight deadline to avert the shutdown of many federal agencies and programs beginning this weekend, when existing funds expire.
(Reporting by Dustin Volz; Editing by Lisa Shumaker)