"Over the course of the past year, Microsoft and other US technology companies have faced growing mistrust and concern about their ability to protect the privacy of personal information located outside the United States," Microsoft said. "The government's position in this case further erodes that trust, and will ultimately erode the leadership of US technology companies in the global market."

Two phone carriers, Verizon Communications and AT&T., have joined the fight, along with Apple and Cisco Systems, submitting arguments in support of Microsoft in recent days to a district judge prior to a late-July hearing.

In court papers, prosecutors said Microsoft's position that the warrant effectively authorizes law enforcement agents to conduct a search in Ireland is "simply not so." They said the warrant is the functional equivalent of a subpoena compelling the Redmond, Washington-based provider to review its stored records and produce relevant material.

Microsoft's position "serves as a dangerous impediment to the ability of law enforcement to gather evidence of criminal activity," they said.

Microsoft lost the first round of what is likely to be a lengthy court battle in April, when the New York magistrate judge who issued the search warrant in December ruled that the Stored Communications Act in the Electronic Communications Privacy Act of 1986 gave the government authority to subpoena information on the Internet that is stored outside the country.

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