Most notably, consumers and businesses that use Microsoft's online services now waive the right to sue and must submit to binding arbitration in the event of a dispute, they must log in to their accounts at least once every 270 days or risk losing them, and accept that Microsoft will upload and store their information "to better protect consumers and improve our products."
Microsoft notified users about the changes to its cloud TOS through an email. It directed recipients to a lengthy document that outlined the new terms, which go into effect later this month. Here are some of the more significant components.
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1. Covered products. Microsoft's revised TOS applies to a whole host of cloud products and services, including Microsoft account, Bing, Office.com, SkyDrive, Windows Live Messenger, Microsoft Photo Gallery, Movie Maker, MSN, and Hotmail.
2. Minimum usage. To keep their accounts active, Microsoft customers must log in at least once every 270 days. "If you fail to sign in during this period, we may cancel your access to the Microsoft branded services," the company notes. "If the Microsoft branded services are canceled due to your failure to sign in, your data may be permanently deleted from our servers."
3. You own the content. Microsoft states explicitly that all content uploaded to its services, including video, text, and photos, is the property of the end user. "Your content remains your content, and you are responsible for it," the company states.
4. But Microsoft can alter it. "When you upload your content to the services, you agree that it may be used, modified, adapted, saved, reproduced, distributed, and displayed to the extent necessary to protect you and to provide, protect, and improve Microsoft products and services."
5. Good behavior required. Microsoft says it reserves the right to boot from its services anyone it deems is violating online etiquette. Behavior that could get a user banned includes violating intellectual property rights of others, lack of use (see above), late payments, and other violations. "We enforce a policy that provides for the termination, in appropriate circumstances, of the accounts of users who are repeat infringers," Microsoft says.
6. You're being watched. Microsoft says it will disclose your personal information to third parties only in instances where it receives a request from legal authorities, or "to help prevent loss of life or serious physical injury to anyone." But that doesn't mean it's not keeping close tabs on users. "We may also automatically upload information about your machine, your use of the services, and services performance," the company states.
7. One license, one user. Microsoft's new cloud terms restrict use of its online software, and software that has a client component, to one, individual user on a single machine. "We grant you the right to install and use one copy of the software per device for use by only one person at a time," according to the company.
8. Mandatory arbitration: Miss an important email because Hotmail was offline? Forget about suing. In using Microsoft's cloud services, you agree to let an arbitrator resolve any dispute you might have with the company. "If you and Microsoft don't resolve any dispute by informal negotiation or in small claims court, any other effort to resolve the dispute will be conducted exclusively by binding arbitration," Microsoft states. "You are giving up the right to litigate (or participate in as a party or class member) all disputes in court before a judge and jury."
The new terms go into effect on Sept. 27, about one month before Windows 8 is scheduled to arrive in stores.