It's no secret that the Chinese government is spying on its own citizens, and censoring what they see and access online. But for major players in the technology industry, such as Microsoft, a foothold in the lucrative Chinese market is worth bowing down to certain ethical considerations that would not ordinarily pass in the Western world.

One U.S. student has shown that, amid rumors that Skype is not as secure or as private as it is believed to be, the Chinese authorities are able to snoop and censor text-based conversations for active censorship and surveillance purposes.

A little back story.

In order to expand to the Chinese market, Microsoft developed a version of Skype, which the Redmond, Washington-based company bought in 2011 for $8.5 billion, with TOM Online, a China-based mobile Internet company. In doing so, it's left a trail of controversy in the eyes of privacy and civil liberties groups, not limited to the Electronic Frontier Foundation (EFF), for pandering to the requirements of the 'oppressive' Chinese government.

The trouble for Microsoft is that in China you have to play by its rules. Exactly how much data is handed to or acquired by the Chinese government from Skype users, however, is not yet known. The EFF and others signed an open letter in January demanding that Microsoft release a transparency report , detailing how the company deals with requests for user data in China and around the world.

The EFF, among others, wanted Microsoft to provide details on the "current operational relationship between Skype with TOM Online in China and other third-party licensed users of Skype technology" is, in order to understand the surveillance and censorship capabilities that users may be subject to.

While Microsoft-owned Skype admits that the China-only version offered by its joint-venture partner contains a chat filter "in accordance with local law," and that TOM Online is the majority stakeholder in the arrangement.

Microsoft remained quiet on the matter, and did not comment at the time.

With a sense of hypocricy, Microsoft is a founding member of the Global Network Initiative, a coalition of companies promoting corporate responsibility in online freedom of speech and expression.

Now, 27-year-old University of New Mexico student Jeffrey Knockel has deconstructed some of Skype's code and revealed a list of words that the Chinese government could use to spy on its own citizens, in an interview with Bloomberg.



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He says on his Web site that: "These lists are used for both censorship and surveillance unless otherwise noted."

His work focused on the text-based communications between TOM-Skype users, and does not relate to the Internet calling (VoIP) service that the service is primarily used for.

But the worrying factor here is that Knockel discovered that TOM-Skype contains a surveillance feature, that when an "offending phrase" is detected a copy of that word is sent to a TOM-Skype server with the account's username, date and time stamp, and whether or not the message was received by the recipient.

While that data may or may not be shared directly with the Chinese government, the country's law enforcement and intelligence services have the legal right to 'subpoena' that data at will and bring charges against citizens—in many cases without a warrant.

Some of these words include (more can be found here, updated daily). In just a sample, you can see that some of these words relate to past events—much of which are censored by Internet providers under mandate by Chinese law to citizens in the country—but also show the overreaching steps by the ruling party to limit the flow of open information to its people:

Sixty-four

Campus upheaval

Truthfulness

Global human era

Actor temperature

Jiang Zemin died suddenly

Anti-Japan

Ferrari 22 years ago

Democratic Unionist Party

Amnesty International

Reporters Without Borders

Flowers to Google

Sex video

Sale of fireworks

Quebec

While results relating to the Tiananmen Square protests in 1989 are filtered, as well as recent events relating to high profile politicians and suchlike, also in the selection of words are organizations that report on freedom of speech in the country, as well as seemingly random phrases, such as "Ferrari" and "Quebec".

References to pornography are also actively monitored by the TOM-Skype application and censored at will.

Knockel discovered during his research that every time he logged in to TOM-Skype, servers based in China would download an ever-updated list of keywords that would hook into the application and monitor his communications. This list of keywords is encrypted but he was eventually able to deconstruct the file into a readable text-based format, albeit in Chinese.

Even those communicating with those outside of China with a version of TOM-Skype are having their communications logged, showing the ability to potentially extra-territorially monitor communications by the Chinese authorities.

From his work, it's now becoming increasingly clear that while Western firms like Microsoft have to comply with Chinese law when operating in the country, there is a significant conflict between U.S. ideals and Chinese oppression of speech.

But no doubt, dozens if not hundreds of other Western or U.S.-based firms are also backseating their own morals and principles in order to tap into the lucrative and ever-expanding Chinese populous.

Knockel, in addition to shedding light on the online censorship and surveillance practices of the Chinese authorites, also received an A+ by his professor for his work.