Yahoo’s Brazil Unit Must Turn Over Emails Stored Abroad

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By Ed Taylor

Brazil’s top court has ordered Yahoo Inc.’s Brazilian unit to turn over customer emails to a criminal court even though the messages are stored on servers outside the country.

The Superior Court of Justice upheld Feb. 7 that Yahoo must turn over the emails or face daily fines of $15,000.

Brazil-based units of multinational companies are subject to Brazilian laws; international law enforcement cooperation agreements to access emails aren’t needed to force Yahoo to comply, the court said.

A similar issue in the U.S. between the Department of Justice and Microsoft Corp. involves emails stored in Ireland related to a drug prosecution. Microsoft declined to turn over the emails, saying U.S. law didn’t authorize turning over emails stored outside the country.

The U.S. Court of Appeals for the Second Circuit agreed. Microsoft argued that the government should use mutual law enforcement assistance treaties to gain the information. The U.S. Supreme Court is scheduled to hear arguments on appeal Feb. 27.

The Brazil case stems from a criminal investigation into the posting of private emails between three executives of Brazil’s state-owned Federal Saving Bank. The emails, dealing with the bank’s home loan policy, were published on a Brazilian website and then in news media.

Law enforcement alleged the website owner that published the emails had violated Brazilian law and requested that Yahoo Brazil turn over emails on the website owners’ account. Yahoo Brazil refused to comply with the order because the emails are stored in the U.S. and could only be provided by the U.S. parent company.

Yahoo Brazil didn’t immediately respond to Bloomberg Law’s requests for comment.

To contact the reporter on this story: Ed Taylor in Rio de Janeiro at correspondents@bloomberglaw.com

To contact the editor responsible for this story: Donald Aplin at daplin@bloomberglaw.com

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