Skip to Content

A Good Week for Microsoft, a Great One for the Cloud

This essay originally appeared in Data Sheet, Fortune’s technology newsletter. Sign up here.

The news is full of warnings that our political and economic systems are broken. But that doesn’t mean everything is off the rails. Consider two events this week where judges and regulators got it right, and made critical decisions that will benefit both companies and consumers in the long run.

The first was a thunderbolt decision in which a unanimous appeals court in New York ruled the U.S. government can’t use a domestic warrant to force Microsoft (MSFT) to turn over emails stored on servers in Ireland. The ruling underscores, like never before, how American courts are growing concerned with due process when it comes to data, and are demanding Congress modernize out-of-date privacy laws.

In any case, the decision is also a coup for Microsoft, which went out on a legal limb in the case, and won support in court from its rivals across the cloud and tech industries.

Microsoft’s cloud investments:

The other piece of good news is that the European Commission formally blessed the Privacy Shield deal that will let companies move data back and forth between the U.S. and the European Union. The pact was far from a sure thing, and the passing of the deal averts a regulatory Armageddon in which American cloud companies like Facebook (FB) and Amazon (AMZN) could have been forced out of Europe because of their data-handling policies.

Taken together, the events reflect a growing awareness that cloud computing is now central to our social and economic lives, and that government authorities see a need to create legal structures to help it thrive.