Luxembourg NSA dragnet hauls in Skype for investigation – report 

Once heralded as a communication tool free from eavesdropping, Skype is now reportedly under scrutiny for secretly and voluntarily handing over personal data on users to government agencies.

The Microsoft-owned instant-messaging site, used by some 600 million people worldwide, is being probed by Luxembourg's data protection commissioner over concerns about its secret cooperation with the US National Security Agency’s Prism spying program, according to a report in the Guardian, the UK newspaper that first broke the story on NSA whistleblower Edward Snowden.

Skype, believed to be the first Internet company among many to be brought within the NSA program, could potentially face criminal and administrative charges, as well as hefty fines if it is found to be in violation of Luxembourg’s data protection laws.

If found guilty, Skype be banned from passing along user data to the US spy agency, the newspaper reported.

The Luxembourg commissioner initiated an investigation into Skype's privacy policies following revelations in June about its ties to the NSA, the Guardian said. No additional comments were immediately available.

Microsoft’s purchase of Skype for $8.5 billion in 2011 “tripled some types of data flow to the NSA,” the Guardian said, citing secret documents in its possession.

But even before the Microsoft buyout, Skype had initiated its own secret program, dubbed Project Chess, which sought ways of making customer communications “readily available to intelligence agencies and law enforcement officials,” The New York Times reported. 

According to the NSA files shown by Snowden to the Guardian, Skype was served with a directive to comply with an NSA surveillance request signed by US Attorney General Eric Holder in February 2011. Several days later, the NSA had successfully monitored its first Skype transmission.

Skype, founded in Estonia in 2003 and now headquartered in Luxembourg, is facing a public backlash in the wake of the Prism disclosures.

"The only people who lose are users," Eric King, head of research at human rights group Privacy International, said in comments to the Guardian. "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."