Microsoft says tech companies are “not comfortable” storing their data in Australia thanks to the new anti-encryption law

Tech companies are no longer comfortable storing their data in Australia after due to their strict encryption laws, warned Microsoft president Brad Smith. Brad Smith was a speaker at the Committee for Economic Development of Australia event in Canberra which took place on Wednesday.

In December, Australia passed a rushed assistance and access bill which allows Australian police and government the powers to issue technical notices. This law requires tech companies to help law enforcement agencies break into individuals’ encrypted data. Using secret warrants, the government can even compel a company to serve malware remotely to the target’s device.

Microsoft has expressed concerns storing their data in Australia saying Microsoft’s operations in Australia remain unchanged, but the company is worried about the law’s “potential consequences”.

Smith said that Australia had “emerged as a country where companies and governments were comfortable” with storing data, a boon to the tech sector and the economy.” “But when I travel to other countries I hear companies and governments say ‘we are no longer comfortable putting our data in Australia’, he added. “So they are asking us to build more data centers in other countries, and we’ll have to sort through those issues.”

Smith said that the bill was written to protect companies from introducing a "systemic weakness" to their platforms, but this is not well defined. After a deal between the Coalition and Labor, a definition was added, but the phrasing is unclear and has left the industry unsure how to interpret it.

Per Smith, “There is this wonderful phrase about enabling companies to avoid creating a systemic weakness but that phrase is not defined," he said. "Until it is defined I think people will worry and we will be among those who will worry because we do feel it is vitally important we protect our customer's privacy."

“We will have to sort through those issues but if I were an Australian who wanted to advance the Australian technology economy, I would want to address that and put the minds of other like-minded governments at ease," he added.

Since its induction, the assistance and access bill has been slammed by many. Those condemning include, Protonmail, a Swiss-based end-to-end email encryption company, and Australia’s email provider, FastMail, who reported that they are losing their customers following the bill.

In a similar resistance yesterday, Atlassian co-founder Scott Farquhar, said that Australian the legislation is putting the Australian technology industry in a “chokehold,” creating uncertainty and putting jobs at risk. He also called on the federal government to keep its promise and revisit the bill.