Microsoft crosses privacy line few expected
For years, we've been told that encryption is the gold standard for digital privacy. If data is encrypted, it is supposed to be locked away from hackers, companies and governments alike. That assumption just took a hit.
In a federal investigation tied to alleged COVID-19 unemployment fraud in Guam, a U.S. territory where federal law applies, Microsoft confirmed it provided law enforcement with BitLocker recovery keys. Those keys allowed investigators to unlock encrypted data on multiple laptops.
This is one of the clearest public examples to date of Microsoft providing BitLocker recovery keys to authorities as part of a criminal investigation. While the warrant itself may have been lawful, the implications stretch far beyond one investigation. For everyday Americans, this is a clear signal that "encrypted" does not always mean "inaccessible."
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Federal investigators believed three Windows laptops held evidence tied to an alleged scheme involving pandemic unemployment funds. The devices were protected with BitLocker, Microsoft's built-in disk encryption tool enabled by default on many modern Windows PCs. BitLocker works by scrambling all data on a hard drive so it cannot be read without a recovery key.
Users can store that key themselves, but Microsoft also encourages backing it up to a Microsoft account for convenience. In this case, that convenience mattered. When served with a valid search warrant, Microsoft provided the recovery keys to investigators. That allowed full access to the data stored on the devices. Microsoft says it receives roughly 20 such requests per year and can only comply when users have chosen to store their keys in the cloud.
We reached out to Microsoft for comment, but did not hear back before our deadline.
According to John Ackerly, CEO and co-founder of Virtru and a former White House technology advisor, the problem is not encryption itself. The real issue is who controls the keys. He begins by explaining how convenience can quietly shift control. "Microsoft commonly recommends that users back up BitLocker recovery keys to a Microsoft account for convenience. That choice means Microsoft may retain the technical ability to unlock a customer's device. When a third party holds both encrypted data and the keys required to decrypt it, control is no longer exclusive."
Once a provider has the ability to unlock data, that power rarely stays theoretical. "When systems are built so that providers can be compelled to unlock customer data, lawful access becomes a standing feature. It is important to remember that encryption does not distinguish between authorized and unauthorized access. Any system designed to be unlocked on demand will eventually be unlocked by unintended parties."
Ackerly then points out that this outcome is not inevitable. Other companies have made different architectural choices. "Other large technology companies have demonstrated that a different approach is possible. Apple has designed systems that limit its own ability to access customer data, even when doing so would ease compliance with government demands. Google offers client-side encryption models that allow users to retain exclusive control of encryption keys. These companies still comply with the law, but when they do not hold the keys, they cannot unlock the data. That is not obstruction. It is a design choice."
Finally, he argues that Microsoft still has room to change course. "Microsoft has an opportunity to address this by making customer-controlled keys the default and by designing recovery mechanisms that do not place decryption authority in Microsoft's hands. True personal data sovereignty requires systems that make compelled access technically impossible, not merely contractually discouraged."
In short, Microsoft could comply because it had the technical ability to do so. That single design decision is what turned encrypted data into accessible data.
"With BitLocker, customers can choose to store their encryption keys locally, in a location inaccessible to Microsoft, or in Microsoft's consumer cloud services," a Microsoft spokesperson told CyberGuy in a statement. "We recognize that some customers prefer Microsoft's cloud storage, so we can help recover their encryption key if needed. While key recovery offers convenience, it also carries a risk of unwanted access, so Microsoft believes customers are in the best position to decide whether to use key escrow and how to manage their keys."
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This case has reignited a long-running debate over lawful access versus systemic risk. Ackerly warns that centralized control has a long and troubling history. "We have seen the consequences of this design pattern for more than two decades. From the Equifax breach, which exposed the financial identities of nearly half the U.S. population, to repeated leaks of sensitive communications and health data during the COVID era, the pattern is consistent: centralized systems that retain control over customer data become systemic points of failure. These incidents are not anomalies. They reflect a persistent architectural flaw."
When companies hold the keys, they become targets. That includes hackers, foreign governments and legal demands from agencies like the FBI. Once a capability exists, it rarely goes unused.
Apple has designed systems, such as Advanced Data Protection, where it cannot access certain encrypted user data even when served with government requests. Google offers client-side encryption for some services, primarily in enterprise environments, where encryption keys remain under the customer's control. These companies still comply with the law, but in those cases, they do not possess the technical means to unlock the data. That distinction matters. As encryption experts often note, you cannot hand over what you do not have.
The good news is that personal privacy is not gone. The bad news is that it now requires intention. Small choices matter more than most people realize. Ackerly says the starting point is understanding control. "The main takeaway for everyday users is simple: if you don't control your encryption keys, you don't fully control your data."
That control begins with knowing where your keys are stored. "The first step is understanding where your encryption keys live. If they're stored in the cloud with your provider, your data can be accessed without your knowledge."
Once keys live outside your control, access becomes possible without your consent. That is why the way data is encrypted matters just as much as whether it is encrypted. "Consumers should look for tools and services that encrypt data before it reaches the cloud — that way, it is impossible for your provider to hand over your data. They don't have the keys." Defaults are another hidden risk. Many people never change them. "Users should also look to avoid default settings designed for convenience. Default settings matter, and when convenience is the default, most individuals will unknowingly trade control for ease of use."
When encryption is designed so that even the provider cannot access the data, the balance shifts back to the individual. "When data is encrypted in a way that even the provider can't access, it stays private — even if a third party comes asking. By holding your own encryption keys, you're eliminating the possibility of the provider sharing your data." Ackerly says the lesson is simple but often ignored. "The lesson is straightforward: you cannot outsource responsibility for your sensitive data and assume that third parties will always act in your best interest. Encryption only fulfills its purpose when the data owner is the sole party capable of unlocking it." Privacy still exists. It just no longer comes by default.
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You do not need to be a security expert to protect your data. A few practical checks can go a long way.
Many people do not realize that their devices quietly back up recovery keys to the cloud. On a Windows PC, sign in to your Microsoft account and look under device security or recovery key settings. Seeing a BitLocker recovery key listed online means it is stored with Microsoft.
For other encrypted services, such as Apple iCloud backups or Google Drive, open your account security dashboard and review encryption or recovery options. Focus on settings tied to recovery keys, backup encryption, or account-based access. When those keys are linked to an online account, your provider may be able to access them. The goal is simple. Know whether your keys live with you or with a company.
Cloud backups are designed for convenience, not privacy. If possible, store recovery keys offline. That can mean saving them to a USB drive, printing them and storing them in a safe place, or using encrypted hardware you control. The exact method matters less than who has access. If a company does not have your keys, it cannot be forced to turn them over.
Not all encryption works the same way, even if companies use similar language. Look for services that advertise end-to-end or client-side encryption, such as Signal for messages, or Apple's Advanced Data Protection option for iCloud backups. These services encrypt your data on your device before it is uploaded, which means the provider cannot read it or unlock it later. Here is a simple rule of thumb. If a service can reset your password and restore all your data without your involvement, it likely holds the encryption keys. That also means it could be forced to hand over access. When encryption happens on your device first, providers cannot unlock your data because they never had the keys to begin with. That design choice blocks third-party access by default.
Default settings usually favor convenience. That can mean easier recovery, faster syncing and weaker privacy. Take five minutes after setup and lock down the basics.
iPhone: tighten iCloud and account recovery
Turn on Advanced Data Protection for iCloud (strongest iCloud protection)
Review iCloud Backup
Strengthen your Apple ID security
Android: lock your Google account and backups
Review and control device backup
Settings may vary depending on your Android phone’s manufacturer.
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Strengthen your screen lock, since it protects the device itself
Settings may vary depending on your Android phone’s manufacturer.
Secure your Google account
Settings may vary depending on your Android phone’s manufacturer.
Mac: enable FileVault and review iCloud settings
Turn on FileVault disk encryption
Review iCloud syncing
Windows PC: check BitLocker and where the recovery key is stored
Confirm BitLocker status and settings
Check whether your BitLocker recovery key is stored in your Microsoft account
If your account can recover everything with a few clicks, a third party might be able to recover it too. Convenience can be helpful, but it can also widen access.
Every shortcut comes with a cost. Before enabling a feature that promises easy recovery or quick access, pause and ask one question. If I lose control of this account, who else gains access? If the answer includes a company or third party, decide whether the convenience is worth it.
These steps are not extreme or technical. They are everyday habits. In a world where lawful access can quietly become routine access, small choices now can protect your privacy later.
Encryption controls who can access your data, but it does not stop every real-world threat. Once data is exposed, different protections matter.
Strong antivirus software helps block malware, spyware and credential-stealing attacks that can bypass privacy settings altogether. Even encrypted devices are vulnerable if malicious software gains control before encryption comes into play.
The best way to safeguard yourself from malicious links that install malware, potentially accessing your private information, is to have strong antivirus software installed on all your devices. This protection can also alert you to phishing emails and ransomware scams, keeping your personal information and digital assets safe.
Get my picks for the best 2026 antivirus protection winners for your Windows, Mac, Android and iOS devices at Cyberguy.com
If personal data is accessed, sold, or misused, identity protection services can monitor for suspicious activity, alert you early and help lock down accounts before damage spreads. Identity Theft companies can monitor personal information like your Social Security Number (SSN), phone number and email address, and alert you if it is being sold on the dark web or being used to open an account. They can also assist you in freezing your bank and credit card accounts to prevent further unauthorized use by criminals.
See my tips and best picks on how to protect yourself from identity theft at Cyberguy.com.
Microsoft's decision to comply with the BitLocker warrant may have been legal. That doesn't make it harmless. This case exposes a hard truth about modern encryption. Privacy depends less on the math and more on how systems are built. When companies hold the keys, the risk falls on the rest of us.
Do you trust tech companies to protect your encrypted data, or do you think that responsibility should fall entirely on you? Let us know by writing to us at Cyberguy.com.
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