Microsoft contends the U.S. government shouldn’t have the power to search the content of email stored overseas, but a federal judge disagrees. U.S. Magistrate Judge James Francis in New York on Friday ruled that Internet service providers must turn over customer emails and other digital content sought by government search warrants even when the information is stored outside the country.

Microsoft lost its first challenge to the authority of the United States government’s use of search warrants to demand data stored abroad. Microsoft challenged a U.S. search warrant for emails stored in Ireland. The cloud does have a physical footprint, after all. The company was not surprised that it lost the initial test, noting in a blog post that “the Magistrate Judge, who originally issued the warrant in question, disagreed with our view and rejected our challenge.” The company states that it “knew the path would need to start with a magistrate judge, and that we’d eventually have the opportunity to bring the issue to a U.S. district court judge and probably to a federal court of appeals.” So, today’s setback for Microsoft is not really a dispiriting moment. Think of it more as a first step.