Suspicious of NSA spying, Microsoft eyes encryption

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WASHINGTON – Microsoft is moving toward a major new effort to encrypt its Internet traffic amid fears that the National Security Agency may have broken into its global communications links, people familiar with the emerging plans said.

Suspicions at Microsoft, while building for several months, sharpened in October when it was reported that the NSA was intercepting traffic inside the private networks of Google and Yahoo, two industry rivals with similar global infrastructures, said people with direct knowledge of the company’s deliberations. They said top Microsoft executives are meeting this week to decide what encryption initiatives to deploy and how quickly.

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Documents obtained from former NSA contractor Edward Snowden suggest — though do not prove — that the company is right to be concerned. Two previously unreleased slides that describe operations against Google and Yahoo include references to Microsoft’s Hotmail and Windows Live Messenger services. A separate NSA email mentions Microsoft Passport, a Web-based service formerly offered by Microsoft, as a possible target of that same surveillance project, called MUSCULAR, which was first disclosed by The Washington Post last month.

Though Microsoft officials said they had no independent verification of the NSA targeting the company in this way, general counsel Brad Smith said Tuesday that it would be “very disturbing” and a possible constitutional breach if true.

Microsoft’s move to expand encryption would allow it to join Google, Yahoo, Facebook and other major technology firms in hardening their defenses in response to news reports about once-secret NSA programs. The resulting new investments in encryption technology stand to complicate surveillance efforts — by governments, private companies and criminals — for years, experts say.

Though several legislative efforts are under way to curb the NSA’s surveillance powers, the wholesale move by private companies to expand the use of encryption technology may prove to be the most tangible outcome of months of revelations based on documents that Snowden provided to The Washington Post and Britain’s The Guardian newspaper. In another major shift, the companies also are explicitly building defenses against U.S. government surveillance programs, in addition to combating hackers, criminals or foreign intelligence services.

“That’s a pretty big change in the way these companies have operated,” said Matthew Green, a Johns Hopkins University cryptography expert. “And it’s a big engineering effort.”

In response to questions about Microsoft, the spy agency said in a statement Tuesday, “NSA’s focus is on targeting the communications of valid foreign intelligence targets, not on collecting and exploiting a class of communications or services that would sweep up communications that are not of bona fide foreign intelligence interest to the U.S. government.”

A U.S. official, who was not authorized to discuss the matter publicly and spoke on the condition of anonymity, said Tuesday that collection can be done at various points and does not necessarily happen on a company’s private fiber-optic links.

A 2009 email from a senior manager of the NSA’s MUSCULAR project specifies that a targeting tool called “MONKEY PUZZLE” is capable of searching only across certain listed “realms,” including Google, Yahoo and Microsoft’s Passport service. It is not clear what service a fourth listed realm, “emailAddr,” refers to. “NSA could send us whatever realms they like right now, but the targeting just won’t go anywhere unless it’s of one of the above 4 realms,” the email said.

The tech industry’s response to revelations about NSA surveillance has grown far more pointed in recent weeks as it has become clear that the government was gathering information not only through court-approved channels in the United States — overseen by the Foreign Intelligence Surveillance Court — but also through the massive data links overseas, where the NSA needs only authority from the president. That form of collection has been done surreptitiously by gaining access to fiber-optic connections on foreign soil.

People familiar with the company’s planning, who spoke on the condition of anonymity to discuss matters not yet publicly announced, said that while officials do not have definitive proof that the NSA has targeted Microsoft’s communication links, they have been engaged in a series of high-level meetings to pursue encryption initiatives “across the full range of consumer and business services.” A cost estimate was not available; key decisions are due to be made at a meeting of top executives this week in Redmond, Washington, where Microsoft is headquartered.

When asked about the NSA documents mentioning surveillance of Microsoft services, Smith issued a sharply worded statement: “These allegations are very disturbing. If they are true these actions amount to hacking and seizure of private data and in our view are a breach of the protection guaranteed by the Fourth Amendment to the Constitution.”

That echoes a similar statement by Google’s general counsel, David Drummond, who said last month that he was “outraged” over the report in The Washington Post about the NSA tapping into the links connecting the company’s network of data centers. Google in September announced an ambitious new set of encryption initiatives, including among data centers around the world. Yahoo made a similar announcement last week.

Microsoft, Google and Yahoo also have joined other major tech firms, including Apple, Facebook and AOL, in calling for limits to the NSA’s surveillance powers. Most major U.S. tech companies are struggling to cope with a global backlash over U.S. snooping into Internet services.

The documents provided by Snowden are not entirely clear on the way the NSA might gain access to Microsoft’s data, and it is possible that some or all of it happens on the public Internet as opposed to on the private data center links leased by the company. But several documents about MUSCULAR, the NSA project that collects communications from links between Google and Yahoo data centers, discuss targeting Microsoft online services. The company’s Hotmail email service also is one of several from which the NSA has collected users’ online address books.

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