Microsoft has admitted it doesn't yet encrypt "server-to-server" communications, although it plans to review its security arrangements in the wake of ongoing revelations about NSA spying.
The non-cryption admission, made by a senior Microsoft legal officer during an EU inquiry, comes shortly after leaks by whistleblower Edward Snowden revealed that Google and Yahoo! data centre interconnects were being tapped by the NSA's spies, as part of a program code-named MUSCULAR.
EMEA vice president of legal and corporate affairs, Dorothee Belz, told a hearing of the European Parliament's Civil Liberties Committee, said "today from servers to server transportation is generally not encrypted that is why we are currently reviewing our security systems to avoid the [possibility] that interception into communication can take place."
On PRISM, Belz maintained the line that Microsoft responded to lawful interception requests without give intelligence agencies or police "unfettered access" to its datacentres. "We do not give direct access to our server. We hand over the data. We pull them."
The key exchange comes at around the 2 hour and 40 minute mark in a video of the hearing of the European Parliament inquiry, which took place on Monday (11 November).
Privacy researcher Caspar Bowden, former chief privacy adviser to Microsoft, told The Register: "Every European company which has used US-based cloud services must have a contract which specifies conditions for secure data processing. "It is negligent for cloud companies to have failed to encrypt the high-speed links between datacentres, and this has left EU citizens' data wide open to political and economic surveillance from many SIGINT powers, not just the NSA.
"These risks were well known before Snowden, and European companies who want to show they are serious about data protection will be considering legal action."
A Microsoft spokesperson told El Reg: "Over the last few years, Microsoft and others have increased protection of customer data travelling across the internet by increasing use of SSL for services.
"However, recent disclosures make it clear we need to invest in protecting customers' information from a wide range of threats, which, if the allegations are true, include governments. We are evaluating additional changes that may be beneficial to further protect our customers' data."
The committee of MEPs is running an ongoing inquiry into the dragnet mass surveillance programmes run by the NSA and Britain's GCHQ. Belz appeared before the committee of MEPs together with Nicklas Lundblad, Google's director of public policy and government relations, and Richard Allan, Facebook's EMEA director for public policy.
Microsoft, Google and Yahoo! are all (either willing or unwilling) participants in the NSA's notorious PRISM web surveillance dragnet program. MEPs questioned them closely and repeatedly on this but all three repeated earlier denials that they provided backdoor (ie, direct) access to customer data to the NSA – or any other government agency.
Whatever the extent of the tech giants' participation in PRISM, the program evidently wasn't revealing enough for the NSA: hence its decision to use MUSCULAR to covertly hoover up any of the bits it might have otherwise have missed by tapping into fibre-optic links leased, or run, by Google (and others) between its data centres.
Google's executive chairman Eric Schmidt reacted with indignation to the MUSCULAR revelations while two Google techies went much further in issuing fuck-you diatribes against the NSA over the program.
Google's Lundblad told MEPs that the internet giant is encrypting server connections and data centre interconnects, which he described as an ongoing process that never finishes. ®