Microsoft Fights Canada’s Data Sovereignty, U.S. Law Wins
France’s Senate and Microsoft: A Clash of Data Sovereignty
June 10, 2025 – A Senate Hearing
The French Senate convened to explore how public procurement can safeguard data sovereignty. Anton Carniaux, Microsoft France’s Director of Public and Legal Affairs, testified and answered questions from senators.
Can Microsoft Shield French Data?
Senators asked if Microsoft could guarantee that data from French citizens would never be transmitted to U.S. authorities without explicit authorization from French authorities. Carniaux replied: “I cannot guarantee this.”
In other words, if the United States issued a legal request for data of a French citizen hosted in the EU, Microsoft would comply regardless of French or EU law.
Beyond France – Canada’s Data Sovereignty
Canada defines data sovereignty as “Canada’s right to control access to and disclosure of its digital information subject only to Canadian laws.” The German and EU laws are among the strictest in the world, but the U.S. law at play is the United States CLOUD Act.
Therefore, Canadians who use Microsoft or other U.S.-based corporate products may have their data provided to the U.S. government. There is nothing Canadians or the Canadian government can do to reverse this.
Microsoft France’s Response
- Microsoft France emphasizes “strong, rigid legal processes” to contest unfounded or potentially illegal U.S. requests.
- This response amounts to little more than, “Trust us.” It erodes the autonomy and sovereignty of France, Canada, and all other nations that wish to control data according to their own laws.
The Canada–U.S. Law Dynamic
If the United States government sends a valid legal request for data on a Canadian resident on Microsoft’s Canadian server or infrastructure, Microsoft will comply without permission from Canadian authorities.
Key Takeaway
Microsoft’s stance indicates that data from French or Canadian citizens hosted in the EU or Canada can be handed over to the U.S. government without local governmental authorization, undermining the proclaimed data sovereignty of those countries.
Why is this a concern?
How the CLOUD Act Shifts Data Ownership in Global Tech
U.S. Tech’s Daily Footprint
Microsoft, Amazon, Google, and their ecosystems touch software, hardware, and internet hosting in almost every routine task.
The CLOUD Act’s Reach
Under the U.S. CLOUD Act, the federal government can demand data from U.S.‑based firms regardless of physical storage location. Key point: The Act overrides any other domestic or international law.
Microsoft France’s Testimony
Representatives from Microsoft France confirmed that U.S. government requests trump Canada’s or any other country’s laws. Takeaway: Microsoft will comply with U.S. directives no matter where the data resides.
Data Residency Versus Sovereignty
- Canada’s Data Residency: Canada has mandated that specific data remain hosted within its borders.
- Assumption of Protection: Canadians believed residency preserved national sovereignty.
- New Reality: The CLOUD Act and an adversarial U.S. administration have altered those protections.
Nations That Rely on Residency
Canada and other sovereign states have enacted residency laws to safeguard local data. The CLOUD Act threatens that safeguard.
Microsoft’s Stance on Sovereignty
Microsoft acknowledges that it does not prioritize data residency or respect the sovereignty of other nations. The company’s current outlook indicates it will prioritize U.S. government requests over any other country’s legal framework.
Conclusion
As the U.S. CLOUD Act solidifies its authority, Canada and other nations must reevaluate their data sovereignty strategies. The situation underscores the tension between U.S. tech giants and global data privacy commitments.
Does this affect the federal government and military?
Risk posed by U.S. data requests to Canada
U.S. legal requests can target any data, whether the data belongs to an individual, an organization, or a government entity. As long as the request is deemed valid in the United States, the specific target or location of the data is irrelevant.
Example: Canadian Defence forces
- The Department of National Defence and the Canadian Armed Forces rely heavily on Microsoft 365.
- They use a defence‑tailored cloud called Defence 365, which provides a common collaboration platform for DND/CAF, stakeholders, and other government departments.
U.S. subpoena scope
In theory, any data stored on or using Microsoft or a U.S.–based organization’s products and infrastructure that is not isolated from the Internet could be subpoenaed by the United States government.
Current U.S. policy concerns
- The current U.S. administration bases a significant portion of its foreign and economic policy on dubious or false pretenses.
- These policies lack a rational, evidence‑based foundation.
- Consequently, many legal requests received by Microsoft or other tech giants may not be evidence‑based or rational.
Implication for Canada
This revelation represents a significant risk to the Government of Canada and its military.
Can Canada and others say no?
A Re‑Imagined View on Canadian Data and U.S. Surveillance
1. The Core Concern
b>Can Canada refuse U.S. data requests? In theory, yes. But practical hurdles remain.
2. Microsoft Servers: A Silent Channel
Even if Canada says “no,” Microsoft’s servers could silently pull data. The Canadian government or the user would remain unaware unless the U.S. authorities or Microsoft themselves surface the information.
3. When Alerts Appear
- Notification protocols: If the user or Canadian authorities learn of data requests, the message will echo, “U.S. is the issue, not Canada.”
- Authority context: The U.S. retains the upper hand, leaving Canada at a disadvantage.
4. Encrypted Data: A Protective Shield
b>Encryption is mandatory for Canadian military and most government branches. In a tightly secure environment, Microsoft would need explicit user hints to extract encrypted data. The U.S. government, to force entry, would have to crack the encryption—an endeavor that demands immense resources.
5. The Encryption Battle
Strong encryption can push cracking near impossibility. Yet historical records show that U.S. administrations, even beyond Trump’s era, tirelessly pursued encrypted data, refusing to relent upon discovering its protected nature.
6. The Ultimate Mitigation
To shield against U.S. legal dominance that overrides Canadian or international statutes, the recommended strategy is straightforward:
- Reduce reliance on U.S.-based digital products.
- Maintain complete offline isolation of critical data.
By adopting these measures, the risk of U.S. legal authority eclipsing Canadian law diminishes substantially.
Takeaway
Canada Faces New Cloud Challenges After Microsoft France Statement
Microsoft France has publicly confirmed that the importance of data sovereignty remains paramount, while also renewing concerns over Canada’s ability to trust non-Canadian cloud providers. The admission is expected to add to the growing calls for Canada to develop a sovereign cloud capability. By reducing reliance on the majority of US-based cloud hosts, Canada could secure a more reliable and secure digital future.
Key Issues Highlighted
- Data Sovereignty remains critical for protecting Canadian personal information.
- Trust Concerns grow over non-Canadian providers, especially Microsoft.
- Locational Limitations underscore that Canada can only rely on data residency for so long.
Implications for Canada’s Cloud Future
These admissions are likely to intensify the push for a sovereign cloud capability. By developing its own secure platform, Canada could:
- Reduce dependence on major US-based hosts
- Guarantee higher compliance with privacy regulations
- Establish a robust foundation for federal and private projects
Government Investment Gap
There has been no public evidence that Canadian officials are actively investing in a sovereign cloud infrastructure. The recent Microsoft notification and the inherent restrictions of data residency emphasize the need for a policy shift.
