Skype Under Investigation in Luxembourg Over Ties to NSA
October 12, 2013

Skype Under Investigation in Luxembourg Over Ties to NSA

Peter Suciu for – Your Universe Online

Microsoft-owned Internet Voice Over IP (VoIP) service Skype is being investigated by Luxembourg’s data protection commission over its alleged secret links to the National Security Agency (NSA), and the Prism spy program, The Guardian newspaper reported on Friday.

The Internet chat company could potentially face criminal and administrative sanctions, which may include a ban on passing users’ communications covertly to the American signals intelligence agency.

While owned by Microsoft, Skype is headquartered in the European country, and thus could face fines if this ongoing investigation finds the data sharing is in violation of the country’s data-protection laws. Skype is headquartered in the small Benelux nation as part of a tax avoidance strategy, Gigaom noted.

Luxembourg authorities began the investigation of Skype after Edward Snowden revealed that large web firms were cooperating with the NSA, and this past July The Guardian reported Skype video call data that was being collected through the NSA’s Prism program actually tripled after Microsoft acquired the company. Microsoft had acquired the VoIP company in 2011 for $8.5 billion.

Since that time, Microsoft has continued to build features into the service, and this spring Skype videoconferencing was built directly into Microsoft’s email service.

Skype was founded in 2003 and was designed to connect callers through encrypted peer-to-peer Internet connections, whereby audio conversations between users were not routed over a centralized network. This made Skype a favored system for those who were looking for privacy and security – and its reputation made it a haven for journalists and activists, as well as criminals who looked to dodge law enforcement “wiretapping” strategies.

After the company was purchased by eBay in 2005, the firm launched a joint venture with Hong Kong-based Tom Online to launch a Chinese version, and The Guardian noted this is when Skype was tweaked to be compliant with dragnet surveillance. A former engineer at the company reportedly told the newspaper this is when the company built in a “listening element” to help Chinese authorities monitor users’ communications for keywords.

When the company was purchased from eBay by an investor group that included American-based private equity firms Silver Lake and Andreessen Horowitz, work began on integrating Skype into the NSA’s Prism program. More recently, in 2011, according to NSA files leaked by Snowden, Skype was served with a directive to comply with NSA surveillance signed by the US Attorney General Eric Holder.

The Luxembourg data protection authority, CNPD, is investigating to ensure the company has respected national law, which calls for each service provider or operator to ensure the confidentiality of communications and related traffic data are respected.

“No person other than the user concerned may listen to, tap or store communications or the traffic data relating thereto, or engage in any other kinds of interception or surveillance thereof, without the consent of the user concerned,” reads the unofficial translation of the law published by the CNPD.

Skype now finds itself facing a backlash from these allegations.

“The only people who lose are users,” Eric King, head of research at human rights group Privacy International, told The Guardian on Friday. “Skype promoted itself as a fantastic tool for secure communications around the world, but quickly caved to government pressure and can no longer be trusted to protect user privacy.”

Skype’s legal woes may not be limited to Luxembourg either. In March the company faced fines for not registering as a telecom in France.

“The company Skype Communications SARL (hereinafter, the “Company Skype”), whose registered office is established in Luxembourg, offers French Internet services that allow phone calls, or from a terminal connected internet, for example a computer or smartphone, using the software provided by another group company Skype, Skype Software SARL company,” reads a translated press statement from France´s telecom regulator, known as ARCEP.