Quoting classified internal NSA newsletters obtained from Snowden, The Guardian newspaper reported that Microsoft had helped the security agency find ways to circumvent its encryption on its Outlook.com portal's encrypted web chat function, and that the agency was given what the daily described as "pre-encryption stage" access to email on Outlook, including Hotmail email.
The Guardian, which did not release the NSA documents that it quoted, said that Microsoft had also provided the FBI with access to its SkyDrive service, a cloud storage service with millions of users.
Microsoft, according to The Guardian, also worked with the FBI to study how Outlook allowed users to create email aliases, while Skype, now owned by Microsoft, worked with the government to help it collect both the video and audio of conversations. It also reported that information collected through the NSA programme code-named PRISM was shared with both the FBI and the CIA.
Microsoft said in a statement that it only provided access to its systems when required to do so by court orders.
"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," the company said in its statement. "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."
The latest disclosure from documents leaked by Snowden underscores the increasingly close ties between the NSA and the high-tech community. Microsoft, Facebook and other companies have already been forced to address questions about their cooperation with the agency following Snowden's disclosure of the PRISM surveillance programme.
Many of the companies have repeatedly denied that they agree to blanket collection requests from the government, despite evidence that the government has for years collected huge amounts of phone and internet data from American citizens.
An NSA internet metadata collection programme revealed by Snowden, for example, was halted in 2011 only after two members of the Senate Intelligence Committee began to question its value.
Fearing a negative public response to their cooperation, some Silicon Valley companies are beginning to openly push back against the security agency. Yahoo, for example, is now asking the Foreign Intelligence Surveillance Court, the secret court that rules on data collection requests by the government, to allow it to make public the record of its 2008 challenge to the constitutionality of the law requiring it to provide its customer data to the agency.
A Yahoo spokeswoman said Thursday that the company was "seeking permission from the FISA court to unseal the arguments and orders from the 2008 case".
Yahoo said in a public filing with the FISA court this week that releasing documents about the 2008 case would allow it " to demonstrate that it objected strenuously to the directives that are now the subject of debate, and objected at every stage of the proceeding, but that these objections were overruled and its request for a stay was denied."
Signs of a popular backlash against the security agency's large-scale collection of the personal data of Americans have convinced a leading privacy advocate in Congress that the Obama administration may soon begin to back away from the most aggressive components of the agency's domestic surveillance programmes.
The advocate, Senator Ron Wyden, an Oregon Democrat and a member of the Senate Intelligence Committee, said in an interview Thursday that he believed that the security agency might soon abandon the bulk collection of the telephone calling data of millions of Americans.
The current controversy over the agency's surveillance policies was first set off after Snowden leaked a secret FISA court order telling Verizon to turn over calling data from all of its customers. Wyden now believes that the White House is beginning to recognise that the programme raises so many privacy concerns that it is willing to drop it.
"I have a feeling that the administration is getting concerned about the bulk phone records collection, and that they are thinking about whether to move administratively to stop it," he said. He added he believed that the continuing controversy prompted by Snowden had changed the political calculus in Congress over the balance between security and civil liberties, which has been heavily weighted toward security since the September 11, 2001, terrorist attacks.
"I think we are making a comeback," Wyden said, referring to privacy and civil liberties advocates.