Daily Israel Report

Microsoft Worked Closely with NSA, Documents Show

New documents say that Microsoft collaborated with U.S. intelligence to allow users' communications to be intercepted.
By Elad Benari
First Publish: 7/12/2013, 5:13 AM

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Microsoft has collaborated closely with U.S. intelligence services to allow users' communications to be intercepted, including helping the National Security Agency to circumvent the company's own encryption, top-secret documents obtained Thursday by the British Guardian show.

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.

According to the Guardian, 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".

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 U.S. citizen and is not on U.S. soil at the time. Targeting U.S. citizens does require an individual warrant, noted the Guardian, 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.

Internal NSA newsletters marked top secret, however, suggest the co-operation between the intelligence community and the companies is deep and ongoing.

According to the Guardian, 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 U.S. 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.

Microsoft's co-operation was not limited to Outlook.com, according to the Guardian. An entry dated April 8, 2013 describes how the company worked "for many months" with the FBI – which acts as the liaison between the intelligence agencies and Silicon Valley on Prism – to allow Prism access without separate authorization to its cloud storage service SkyDrive.

In its statement to the Guardian, Microsoft said, “We have clear principles which guide the response across our entire company to government demands for customer information for both law enforcement and national security issues. First, we take our commitments to our customers and to compliance with applicable law very seriously, so we provide customer data only in response to legal processes.

“Second, our compliance team examines all demands very closely, and we reject them if we believe they aren't valid. Third, we only ever comply with orders about specific accounts or identifiers, and we would not respond to the kind of blanket orders discussed in the press over the past few weeks, as the volumes documented in our most recent disclosure clearly illustrate.

“Finally when we upgrade or update products legal obligations may in some circumstances require that we maintain the ability to provide information in response to a law enforcement or national security request. There are aspects of this debate that we wish we were able to discuss more freely. That's why we've argued for additional transparency that would help everyone understand and debate these important issues.”

In a joint statement, Shawn Turner, spokesman for the director of National Intelligence, and Judith Emmel, spokeswoman for the NSA, said, “The articles describe court-ordered surveillance – and a U.S. company's efforts to comply with these legally mandated requirements. The U.S. operates its programs under a strict oversight regime, with careful monitoring by the courts, Congress and the Director of National Intelligence. Not all countries have equivalent oversight requirements to protect civil liberties and privacy.”

They added, "In practice, U.S. companies put energy, focus and commitment into consistently protecting the privacy of their customers around the world, while meeting their obligations under the laws of the U.S. and other countries in which they operate."