Microsoft Can Now Listen To All Skype Calls..

There was a wildly terrifying story published late Friday on Slate that didn’t get much attention because of the time of the week it was released.

In it, the author – Ryan Gallagher – lays out how Microsoft (MSFT) seems to have made some subtle and (to most) imperceptible changes to the popular Skype calling service that allows it to eavesdrop on all of your calls going forward. (Forbes contributor Anthony Wing Kosner flagged the service changes in an earlier  post published July 18.)

Although it’s not completely clear, some seem to think that Microsoft may have made the changes either from or in anticipation of pressure from various government entities. Shocked?  I certainly was.

One of the reasons that Skype has grown so swiftly in the last 5 years was the belief by many users that the founders from Luxembourg had taken steps to make the service one of the most locked-down and encrypted services available to communicate with.

But in May 2011, Microsoft announced that it was spending $8.5 billion to buy Skype and that it would form a new division within the software giant.  From the start, observers wondered how Microsoft could justify paying so much for a service that most of its users pay nothing for but which still lets them talk for free to other Skype users.  Microsoft countered by saying that Skype was the world leaders in voice-over-IP communications and it wanted to own that brand and was sure that it could be sold alongside other popular Microsoft enterprise-focused software and services.

(Given that Microsoft just wrote down its last blockbuster multi-billion dollar acquisition by $6.2 billion after paying $6.3 billion for aQuantive in 2007, it’s hard not to be suspicious that they haven’t made the same mistake with Skype.  But, we’ll see….)

As Gallagher points out, “in June [2011], Microsoft was granted a patent for ‘legal intercept’ technology designed to be used with VOIP services like Skype to ‘silently copy communication transmitted via the communication session.’”

Gallagher tried several times last week to confirm that Microsoft had changed Skype’s policies and technologies to allow for accessing all communications.  He got no response, which strongly suggests that they are able to do this.  It’s also important to note that Skype/Microsoft denied the allegation that the change to its architecture this Spring had anything to do with surveillance, according to the Slate article.

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