Microsoft Israel head steps down after internal investigation into dealings with Israeli military

Head of Microsoft's Israel branch to step down after inquiry into dealings with Israeli military

The inquiry came after a Guardian investigation revealed Israel used company technology to support mass surveillance of Palestinian phone calls The head of Microsoft's Israeli subsidiary will step down in the wake of an inquiry that has scrutinised its business dealings with the Israeli military. Microsoft ordered the inquiry last year in response to a Guardian investigation revealing the military had used the company's technology to operate a powerful surveillance system that collected Palestinian civilian phone calls on a mass scale. The joint investigation with the Israeli-Palestinian publication, +972 Magazine, and the Hebrew-language outlet, Local Call, found the military's elite spy agency, Unit 8200, had used Microsoft's Azure cloud platform to store a vast trove of intercepted calls from Gaza and the West Bank. The inquiry commissioned by Microsoft is understood to have recently concluded. Its findings are unclear, however sources familiar with the situation said they prompted an announcement last week that Microsoft Israel's general manager, Alon Haimovich, would leave the company. The Israeli business newspaper, Globes, reported on Monday that Haimovich's departure followed a major controversy at the subsidiary relating to violations of Microsoft's code of ethics. It reported that several other managers had also left their positions. Within weeks of launching the inquiry, Microsoft concluded that its initial findings showed Unit 8200 had violated its terms of service, which prohibit the use of its technology to facilitate mass surveillance. As a result, the company terminated the unit's access to cloud services and AI products used to support the surveillance project. Equipped with Azure's near-limitless storage capacity and computing power, Unit 8200 built an indiscriminate system allowing its intelligence officers to collect, play back and analyse the content of millions of Palestinian cellular phone calls every day. Details of the surveillance programme's reliance on Azure sparked concerns among senior executives at Microsoft that some of its Israel-based employees may not have been fully transparent with headquarters about how Unit 8200 used the company's technology. Sources familiar with the inquiry, which involved lawyers at Covington & Burling, a US firm, said this had been one area of focus. According to Globes, Haimovich was summoned by the inquiry team after they visited Microsoft Israel's offices near Tel Aviv. Documents seen by the Guardian suggest Haimovich played a role in developing the relationship between Microsoft Israel and Unit 8200 following a 2021 meeting between Microsoft's chief executive, Satya Nadella, and the unit's then commander. This included overseeing a partnership with the spy agency to build a segregated area within Azure to store sensitive intelligence material. Once complete, Unit 8200 began to move the expansive archive of everyday Palestinian communications into Microsoft's cloud infrastructure. Haimovich did not respond to a request for comment. In an email to staff announcing his departure last week, he said he had positioned Israel as "one of Microsoft's fastest-growing markets worldwide". Microsoft has previously said its senior executives such as Nadella were unaware Unit 8200 was using Azure to store intercepted Palestinian communications. The company's vice chair and president, Brad Smith, said last year: "We do not provide technology to facilitate mass surveillance of civilians."

Amidst Xbox boycotts and media pressure, Microsoft reportedly restructures Israeli office after internal investigation into ethical violations

Microsoft's investigation into the ethical conduct of its Israeli office, and its work with the Israeli Ministry of Defense - particularly in relation to storing user data on Microsoft's servers - has resulted in the departure of the general manager there and several other managers. This is according to news publication Globes, which also heard that for the time being, Microsoft's rudderless Israeli office will be led by Microsoft France. Microsoft's investigation is a result of a report aired on The Guardian last year about the use of Microsoft's cloud technology and artificial intelligence services by the Israeli military during the most intensive bombardments of Gaza. People Make Games also published a detailed video on the issue later that year, reporting from a Microsoft data center in Holland alleged to have been storing Ministry of Defence-intercepted audio recordings, and many other forms of data, from millions of Palestinian people. It's a situation that's given rise to calls to boycott Microsoft - and in particular subsidiaries like Xbox - until the matter is resolved or at least addressed. Earlier this year, an indie studio returned Microsoft game-funding money because of the company's involvement with Israel, and other studios have removed their games from sale on Microsoft platforms as well. Globes reports that Microsoft decided to "unilaterally terminate" its usage agreement with IDF intelligence Unit 8020 in September last year because of the surfacing reports, and the subsequent protests that erupted because of them. At the time, Microsoft president Brad Smith wrote (as per Globes' report): "Microsoft is not a government or a state - we are a private company - and like any company we decide what products and services to offer our customers. "We decided to investigate the Guardian's claims about the IDF's use of Azure to store recordings of phone calls obtained through extensive and mass surveillance in Gaza and the West Bank, based on two principles: protecting privacy and preventing mass surveillance of citizens. We have applied this principle in every country in the world and have insisted on it repeatedly for more than two decades." But pressure on the company has continued to mount. The result is this latest development: a team sent from Microsoft headquarters to Israel several weeks ago to investigate. Microsoft is said to have been particularly concerned that Israel's Ministry of Defense was using its services in non-transparent ways that violated its terms of use. Alon Haimovich, the then-general manager of Microsoft Israel, was brought in to answer for this. The result? Haimovich left the company after four years last week. The Globes report goes on to point out that Microsoft and Israel's Ministry of Defense are due to renew their contract at the end of the year, and that apparently both parties are interested in continuing it "albeit on a smaller scale". Meanwhile, the Israeli Ministry of Defense is apparently eyeing Amazon's and Google's cloud storage as an alternative. Meanwhile, Microsoft is trying to relaunch its Xbox brand, appointing an unexpected new leader in Asha Sharma, who'll take center stage during the annual summer game festivities next month as she tries to convince the world that Xbox, as a console, is a contender again. Neither Sharma nor the gaming segment's previous leadership have commented on calls for people to boycott Xbox because of Microsoft's ties to Israel. Microsoft declined to comment on Globes' report, but we are separately seeking comment from the company.