Skype’s privacy credentials have been under close scrutiny since July when the chat service refused to comment on whether it could eavesdrop on conversations. Now Skype is facing another privacy-related backlash—after allegedly handing over user data to a private security firm without a warrant. Could this mounting distrust lead to Skype’s downfall?

SiliconANGLE Contributing Editor John Casaretto gave some background on the story, going back to December 2010 when PayPal used a private security firm called iSight to help track down some hackers who attacked PayPal for blocking payments to WikiLeaks. Skype is also one of iSight’s clients, and the relationship here is that Skype gave out user data of one of the PayPal hackers to iSight without a court order.

Was Skype in the wrong for providing this information in light of the fact that the person in
question was somebody who could launch a cyber attack? Casaretto thinks it should follow a normal criminal investigative disclosure, but in this case, he said, “The lack of the court warrant, and the fact that it eventually got to authorities without really knowing it was going down that route – it’s a measure for concern.”

Last week, Microsoft announced that its Windows Live Messenger service would be discontinued and all users migrated over to Skype. Casaretto doesn’t believe that users should be overly concerned with making the transition. He said it’s possible that businesses which are involved in situations that contain highly sensitive information may want to look into other options, but that it would be an on-going issue for Skype. See the entire segment with Kristin Feledy and John Casaretto on the Morning NewsDesk Show.