The Washington Post reports: 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, said people familiar with the emerging plans.

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.

Documents obtained from former NSA contractor Edward Snowden suggest — but 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 e-mail 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. [Continue reading…]