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Microsoft to store data in Germany to keep it from third parties

Microsoft CEO: Governments need to catch up to Big Data
Microsoft CEO: Governments need to catch up to Big Data

Microsoft has taken a big, bold move to ensure its European customer data is kept out of the reach of prying U.S. authorities.

The company is opening two new special data centers in Germany that will be controlled by its German partner, Deutsche Telekom(DTEGY).

This arrangement was designed to ensure the U.S. government cannot force Microsoft(MSFT, Tech30) to pass along data from these centers. U.S. authorities would need the permission of customers, and the German company, to get access.

“Our new data center[s] … offer customers choice and trust in how their data is handled and where it is stored,” said Microsoft CEO Satya Nadella.

Paul Miller, a senior analyst and cloud computing expert at Forrester Research, said Microsoft was the first large American company to take this approach to data protection in Europe.

The move could alleviate a “nagging fear that the U.S. can compel a U.S. registered company to hand over data,” Miller said. Competitors such as Amazon(AMZN, Tech30), IBM(IBM, Tech30) and Google(GOOGL, Tech30) may feel pressure to offer similar options, he added.

Microsoft expects its German data centers to prove popular with clients handling sensitive health and financial data. They are due to come online in late 2016.

Here's what the cloud actually looks like
Here’s what the cloud actually looks like

The European Union has rigorous rules to protect data, and Germany’s regulations are considered especially strict.

European authorities have been clamping down on data protection in recent months over concerns about mass spying by U.S. intelligence services.

Revelations made by former NSA contractor Edward Snowden that the U.S. spied on German officials, including Chancellor Angela Merkel, angered Berlin.

Last month, the European Court of Justice declared invalid a “Safe Harbor” agreement between the European Union and the U.S. that allowed Facebook(FB, Tech30) and other firms to transfer data in huge quantities to their servers in the U.S.

The court threw this deal in the bin because it was worried about “mass indiscriminate surveillance and interception” of personal data by the U.S. authorities.

Experts say the ruling was a direct consequence of Snowden’s leaks.

Related: Edward Snowden joins Twitter

Related: Belgium doesn’t like Facebook tracking non-users

CNNMoney (London) November 11, 2015: 9:16 AM ET

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