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Microsoft are on a roll with bad press, and the latest news will undoubtedly not go down too well.

IGN are citing The Guardian who have disclosed a full report on top-secret documents blowing the whistle on how Microsoft collaborated with US intelligence services to allow users’ communications to be intercepted. Microsoft reportedly provided the NSA access to outlook emails, Skype video calls and SkyDrive data.

The Guardian obtained files provided by Edward Snowden which disclose the co-operation between Silicon Valley and the intelligence agencies over the last three years.

The documents show that:

• Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal;

• The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail;

• The company worked with the FBI this year to allow the NSA easier access via Prism to its cloud storage service SkyDrive, which now has more than 250 million users worldwide;

• Microsoft also worked with the FBI’s Data Intercept Unit to “understand” potential issues with a feature in Outlook.com that allows users to create email aliases;

• In July last year, nine months after Microsoft bought Skype, the NSA boasted that a new capability had tripled the amount of Skype video calls being collected through Prism;

• Material collected through Prism is routinely shared with the FBI and CIA, with one NSA document describing the program as a “team sport”.

Microsoft replied in a statement explaining that when it upgrades or updates products, it isn’t “absolved from the need to comply with existing or future lawful demands.”

Microsoft therefore argues that it provides customer data “only in response to government demands and we only ever comply with orders for requests about specific accounts or identifiers”.

The Guardian notes that Microsoft’s latest marketing campaign emphasizes its commitment to privacy with the slogan: “Your privacy is our priority.” Secret internal NSA newsletters however, suggest the co-operation between the intelligence community and the Microsoft is deep and ongoing.

Microsoft latest responding statement to The Guardian’s article is as follows:

We have clear principles which guide the response across our entire company to government demands for customer information for both law enforcement and national security issues.

First, we take our commitments to our customers and to compliance with applicable law very seriously, so we provide customer data only in response to legal processes. Second, our compliance team examines all demands very closely, and we reject them if we believe they aren’t valid. Third, we only ever comply with orders about specific accounts or identifiers, and we would not respond to the kind of blanket orders discussed in the press over the past few weeks, as the volumes documented in our most recent disclosure clearly illustrate. To be clear, Microsoft does not provide any government with blanket or direct access to SkyDrive, Outlook.com, Skype or any Microsoft product.

Finally when we upgrade or update products legal obligations may in some circumstances require that we maintain the ability to provide information in response to a law enforcement or national security request. There are aspects of this debate that we wish we were able to discuss more freely. That’s why we’ve argued for additional transparency that would help everyone understand and debate these important issues.

Read the full article on The Guardian.