All legal process for criminal matters from non-U.S. law enforcement, prosecutors and courts must be directed to Microsoft Corporation, One Microsoft Way … and not to Microsoft’s local subsidiary as all Microsoft Online Services customer data is stored in the U.S.

In the past Microsoft has been happy to comply with the oppressive wishes of foreign governments, such as closing US based blogs about China. Because the information actually resides in the US, it is clear that it is actually under US control except for business interests. It is doubtful, for example, that China would exert force to retrieve data Microsoft refused to share. It’s likely that Microsoft goes above and beyond what they advertise in this police sales material and that they do it for $50/hour – please hold while we take your call.

Microsoft’s ability and willingness to keep data to themselves is another matter. Microsoft’s character will have them sell to the highest bidder, they were unable to keep their source code secrets to themselves and Sidekick Danger shows they can’t keep things at all. No one should trust those greedy clowns.

Remember that Microsoft also uses Windows Update to get a list of all applications a Windows user has installed (including competitors like Mozilla). It can track changes over time.

It’s a particularly interesting prospect for those of us not based in the same country as the service. Local laws which may protect privacy further can be easily subverted, etc.