We brought you word earlier this week that some people think Skype is beginning to spy on people who use the service. The switch to dedicated servers instead of P2P would make it easier for the folks at Skype to store chat logs and audio records. Microsoft wouldn't say if they were spying or not, but all signs pointed to probably not.
I might have spoken too soon as the folks at The Washington Post spoke to a couple of people close to the matter to get the real story. They found that Skype is spying on you, but only your text chats. The company can't effectively share your audio and video logs with authorities, but they will cooperate with police if they have a suspicion that you're up to no good.
Before you get all worried, know that Microsoft is treating your data with "tremendous sensitivity and a canny awareness of what the issues would be." That probably doesn't make you any less worried, but it looks like Microsoft is just cooperating with police when the need arises.
The authorities don't care that you use Skype to keep in touch with your parents or that you send messages to your long distance significant others. What they care about is nabbing the criminals who use Skype because it has traditionally been more secure than other forms of communication.
Of course, these criminals are going to move from Skype now that the news is out. It seems that the authorities are always one step behind the technology curve, but they're fine with gutting other forms of communication while they're trying to play catch up. Skype will not necessarily fall to the hands of the authorities in their misguided attempt to catch criminals, but it might have the negative consequence of forcing legitimate users to leave over concerns of privacy.