This error doesn’t allow you to use the webcam for Skype thus making video conferencing impossible. It can occur for both internal/integrated and external webcams.
Your webcam is being used by another application, says Skype
This issue doesn’t have anyone specific cause. A few of the probable causes are as follows: Considering the various possibilities, you could troubleshoot the problem sequentially as follows: 1] Run an anti-virus scan Run a full system anti-malware scan, thus eliminating the possibility of such a cause. 2] Kill the process using the camera Open the Task Manager (press CTRL+ALT+DEL to open the Security Options window and select Task Manager from the list). Check if any program other than Skype which uses the camera is still active and running. If yes, you might consider killing the process and restarting the system. 3] Disable Firewall Temporarily disable any anti-virus or Firewall on the system. This is to make sure that neither of those interferes with the functioning of the webcam. You may switch then ON after isolating the issue. 4] Update the camera drivers Press Win + R to open the Run window. Type the command devmgmt.msc and press Enter to open the Device Manager. Expand the list of Camera drivers and right-click on your webcam’s driver and select Update driver.
Restart the system. 5] Switch ON “Allow apps to access the camera.” Click on the Start button and then select the gear-like symbol to open the Settings menu. Go to Privacy. In the list for App permissions on the left-hand side, select Camera. Turn the toggle switch ON for Allow apps to access your camera.
Also, check the list under Choose which apps can access your camera. The switch should be ON for Skype. Remember that Skype for Desktop shows different from the pre-installed Skype app on your system. 6] Reset the Camera app Even if we missed unlinking the camera to a program which was using it, resetting the app would do the job. Click on Start > Settings > Apps > Apps & features. Scroll through the list to locate the Camera app. Click on it to expand the options and select Advanced options.
Scroll through the options and find Reset. Click on Reset and allow it to process.
Restart the system once the job is done. 7] Disable webcam protection Certain security software comes with webcam protection. It might be an option is your general anti-virus software, or it could be a dedicated software. If you are aware of the same, disabling webcam protection temporarily to isolate the issue could be helpful. 8] Re-install Skype for Desktop If everything else failed, you could consider uninstalling and reinstalling Skype for Desktop. Just like any other application, Skype can be uninstalled from the Programs and Features menu in the Control Panel. You can re-install the application from Skype’s official website. All the best!