Revealed: how Microsoft handed the NSA access to encrypted messages

• Secret files show scale of Silicon Valley co-operation on Prism
• Outlook.com encryption unlocked even before official launch
• Skype worked to enable Prism collection of video calls
• Company says it is legally compelled to comply

• Glenn Greenwald, Ewen MacAskill, Laura Poitras, Spencer Ackerman and Dominic Rushe
• The Guardian, Thursday 11 July 2013 13.53 EDT

Skype worked with intelligence agencies last year to allow Prism to collect video and audio conversations. Photograph: Patrick Sinkel/AP

Microsoft has collaborated closely with US intelligence services to allow users' communications to be intercepted, including helping the National Security Agency to circumvent the company's own encryption, according to top-secret documents obtained by the Guardian.
The files provided by Edward Snowden illustrate the scale of co-operation between Silicon Valley and the intelligence agencies over the last three years. They also shed new light on the workings of the top-secret Prism program, which was disclosed by the Guardian and the Washington Post last month.
The documents show that:
• Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal;
• The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail;
• The company worked with the FBI this year to allow the NSA easier access via Prism to its cloud storage service SkyDrive, which now has more than 250 million users worldwide;
• Microsoft also worked with the FBI's Data Intercept Unit to "understand" potential issues with a feature in Outlook.com that allows users to create email aliases;
• In July last year, nine months after Microsoft bought Skype, the NSA boasted that a new capability had tripled the amount of Skype video calls being collected through Prism;
• Material collected through Prism is routinely shared with the FBI and CIA, with one NSA document describing the program as a "team sport".
The latest NSA revelations further expose the tensions between Silicon Valley and the Obama administration. All the major tech firms are lobbying the government to allow them to disclose more fully the extent and nature of their co-operation with the NSA to meet their customers' privacy concerns. Privately, tech executives are at pains to distance themselves from claims of collaboration and teamwork given by the NSA documents, and insist the process is driven by legal compulsion.
In a statement, Microsoft said: "When we upgrade or update products we aren't absolved from the need to comply with existing or future lawful demands." The company reiterated its argument that it provides customer data "only in response to government demands and we only ever comply with orders for requests about specific accounts or identifiers".
In June, the Guardian revealed that the NSA claimed to have "direct access" through the Prism program to the systems of many major internet companies, including Microsoft, Skype, Apple, Google, Facebook and Yahoo.
Blanket orders from the secret surveillance court allow these communications to be collected without an individual warrant if the NSA operative has a 51% belief that the target is not a US citizen and is not on US soil at the time. Targeting US citizens does require an individual warrant, but the NSA is able to collect Americans' communications without a warrant if the target is a foreign national located overseas.
Since Prism's existence became public, Microsoft and the other companies listed on the NSA documents as providers have denied all knowledge of the program and insisted that the intelligence agencies do not have back doors into their systems.
Microsoft's latest marketing campaign, launched in April, emphasizes its commitment to privacy with the slogan: "Your privacy is our priority."
Similarly, Skype's privacy policy states: "Skype is committed to respecting your privacy and the confidentiality of your personal data, traffic data and communications content."
But internal NSA newsletters, marked top secret, suggest the co-operation between the intelligence community and the companies is deep and ongoing.
The latest documents come from the NSA's Special Source Operations (SSO) division, described by Snowden as the "crown jewel" of the agency. It is responsible for all programs aimed at US communications systems through corporate partnerships such as Prism.
The files show that the NSA became concerned about the interception of encrypted chats on Microsoft's Outlook.com portal from the moment the company began testing the service in July last year.
Within five months, the documents explain, Microsoft and the FBI had come up with a solution that allowed the NSA to circumvent encryption on Outlook.com chats
A newsletter entry dated 26 December 2012 states: "MS [Microsoft], working with the FBI, developed a surveillance capability to deal" with the issue. "These solutions were successfully tested and went live 12 Dec 2012."
Two months later, in February this year, Microsoft officially launched the Outlook.com portal.
Another newsletter entry stated that NSA already had pre-encryption access to Outlook email. "For Prism collection against Hotmail, Live, and Outlook.com emails will be unaffected because Prism collects this data prior to encryption."



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