Ron Deibert of the University of Toronto's Citizen Lab says,
The first Information Warfare Monitor/ONI Asia major investigative report has been released -- Breaching Trust: An analysis of surveillance and security practices on China's TOM-Skype platform, written by Nart Villeneuve, Psiphon Fellow, the Citizen Lab, at the Munk Centre for International Studies, the University of Toronto.
John Markoff of the New York Times has just released a story about the report: Surveillance of Skype Messages Found in China.
Major Findings of this report are as follows:
* The full text chat messages of TOM-Skype users, along with Skype users who have communicated with TOM-Skype users, are regularly scanned for sensitive keywords, and if present, the resulting data are uploaded and stored on servers in China.
* These text messages, along with millions of records containing personal information, are stored on insecure publicly-accessible web servers together with the encryption key required to decrypt the data.
* The captured messages contain specific keywords relating to sensitive political topics such as Taiwan independence, the Falun Gong, and political opposition to the Communist Party of China.
* Our analysis suggests that the surveillance is not solely keyword-driven. Many of the captured messages contain words that are too common for extensive logging, suggesting that there may be criteria, such as specific usernames, that determine whether messages are captured by the system.
As my colleague Rafal Rohozinski and I say in the foreword to the report, "If there was any doubt that your electronic communications -- even secure chat -- can leave a trace, Breaching Trust will put that case to rest. This is a wake up call to everyone who has ever put their (blind) faith in the assurances offered up by network intermediaries like Skype. Declarations and privacy policies are no substitute for the type of due diligence that the research put forth here represents."
UPDATE: Skype admits the breach and apologizes.
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