The main points as summarized in the Guardian:
• Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal;
• The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail;
• The company worked with the FBI this year to allow the NSA easier access via Prism to its cloud storage service SkyDrive, which now has more than 250 million users worldwide;
• Microsoft also worked with the FBI's Data Intercept Unit to "understand" potential issues with a feature in Outlook.com that allows users to create email aliases;
• Skype, which was bought by Microsoft in October 2011, worked with intelligence agencies last year to allow Prism to collect video of conversations as well as audio.
While it was previously reported that the NSA scooped up vast quantities of user communications, it was not known that they were getting access to unencrypted data.
Microsoft defended its actions, saying it was legally obliged to collaborate with the government and not allowed to disclose the partnership.
Microsoft and other Silicon Valley firms have independently lobbied the government for the ability to disclose more details of their relationship with the American intelligence community, according to reporters