What? What he said, while crude , was nothing like that.
He is saying that those in control of the data if subject to the jurisdiction of law can be compelled to deliver access to it even if it resides outside the country or jurisdiction else bad things could happen.
I agree with that premise to. In this situation, it is a product of MS shifting revenue around in order to take advantage of Ireland's low taxes. It demonstrates MS' level of control over that operation.