If recent revelations about the US governments spying activities still has sent shivers down your spine, this latest bit just might do it. At least it did for some Google employees. It seems highly probable that the NSA has been utilizing its broad overseas reach to tap into Google's and Yahoo's lines to intercept data being exchanged not only between Americans but with other nations' citizens as well.
This broad power comes from Executive Order 12333 which grants the NSA the legal mandate to conduct its digital surveillance outside the US. This is worse than PRISM, which at least requires some amount of filtering of the data collected within the country. Google and Yahoo are both US-based companies and as such are legally bound to comply with orders to surrender data from their American data centers, should the need arise in the government's effort to combat threats to national security, or whatever other reason it has. Thus, these companies rely on privately owned or leased connections outside the country in order to preserve some amount of security and privacy.
However, under the so-called MUSCULAR operation, not even those lines are considered sacred. An analysis made by the Washington Post, together with some employees from Google and Yahoo, reveal that the NSA has likely tapped into those fiber and cable connections in data centers located in Chile, Ireland, Finland, Belgium, Taiwan, Hong Kong, Singapore, and more. Should those be inadequate, the NSA has other means of acquiring overseas data, according to Washington Post, which includes enlisting the assistance of its English counterpart, the Government Communications Headquarters or GCHQ, in coercing, of course legally, third-party cable operators to divulge records to the US agency.
The NSA would naturally deny such a gross and broad operation that encroaches on territories that would normally be outside its jurisdiction. Google was, of course, incensed over the news, which included a diagram that subtly boasted having one-upped the search giant, whose dream, by the way, is to be the world's repository of knowledge. Google has been hastily strengthening its encryption in its international data centers to prevent scenarios such as this.