The Guardian reports that GCHQ, a British analog to the National Security Agency, collected and stored images from Yahoo webcam streams through a program called "Optic Nerve." According to the report, the agency targeted "millions of internet users not suspected of wrongdoing," including citizens of both the United States and the United Kingdom, with the program. What's unclear is whether it actually constitutes illegal spying.
For one thing, under UK law, GCHQ is permitted to collect images of British citizens, including through hacking or wiretapping.
What we do know, because a Yahoo spokesperson just confirmed it to me, is that prior to 2012, Yahoo did not encrypt its webcam traffic.
(The company previously issued a mea culpa about allowing data to flow unencrypted between its servers, and has resolved to encrypt all data in the future.) Again, the idea of government workers sifting through gigabytes of camgirl (and camboy) footage in order to build tools to better monitor the rest of us is certainly icky -- but it's also something which any committed 14 year old boy was probably doing at the time.
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GCHQ's monitoring of Yahoo's webcam traffic also halted in 2012.
According to the Guardian, the only legal restriction the agency faces is one that prevents analysts from viewing the images if their subjects are suspected of being in the British Isles at the time.(Both GCHQ and the NSA insist that all of their actions, including those revealed by this report, are legal.) The report states that the image gathering, which GCHQ claims was intended to identify suspected terrorists and to test a facial recognition system, took place between 20.