Will Online Privacy Be Better When Microsoft Takes Over Skype's China Business?November 11, 2013 | Print | Comments | Category: Internet, Security, Software
Starting November 24, 2013, Microsoft will take over Skype's business in the China region.
Tom-Skype, the business unit within China-based TOM Online Inc. that has run Skype's business for many years, published a report on its official website to announce the handover. The report also revealed that so far Tom-Skype has gained over 100 million users in China.
In September 2005, eBay acquired Skype for USD2.6 billion. Four years later, eBay sold a 70% stake in Skype to an investment consortium led by Silver Lake. In 2011, Microsoft acquired the full equity of Skype for USD8.5 billion.
In July 2012, rumors abounded that the operating agreement between TOM Online and Skype expired at the end of 2011 and the companies were still locked in negotiations about the future direction of the Internet telephony service.
More importantly to privacy advocates is how the changeover to Microsoft will impact the privacy restrictions on Skype in China. During the time that TOM Online ran Skype in China, the messaging and data generated by Tom-Skype users ran through TOM Online servers that were open to Chinese government scrutiny. If a user in China downloaded the Skype software, the software was a special Tom-Skype version that ran over TOM Online's servers. The only way a China-based user could avoid downloading the tainted software was to use a proxy or VPN to access a clean version of Skype from overseas that did not run data through TOM Online's servers.
However, with recent revelations in the United States that companies like Microsoft have been complicit in giving the U.S. National Security Administration access to the company's troves of user data, Microsoft may be as bad a custodian as TOM Online is respecting users' privacy. Microsoft has not yet revealed if it will house China-based Skype user data inside China or overseas.
TOM Online is a subsidiary of TOM Group owned by billionaire Li Ka-shing. The company mainly provides wireless value-added services, Internet advertising, free and paid email services, and online games.
Update [November 11, 2013, 16:05 +8 GMT]: Multiple Chinese media are now reporting that TOM Online overstated the amount of users it has on Skype. Instead, Microsoft reportedly states that it does not reveal data in specific countries and that its total global reach is only about 300 million. So the statement from TOM Online's website is incorrect and/or misleading. In addition, media are reporting that when Microsoft takes over Skype, it will do so in China via a joint venture partner.
Image Credit: karen roach
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