Microsoft has stated that, per the USA Patriot Act, the US government can have access to the data even if the hosted company is not American and the data resides outside the USA. However, Windows Azure is compliant with the E.U. Data Protection Directive (95/46/EC). To manage Privacy and Security related concerns, Microsoft has created a Windows Azure Trust Center, and Windows Azure has several of its services compliant with several compliance programs including ISO 27001 and HIPAA. A full and current listing can be found on the Windows Azure Trust Center Compliance page.
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