Microsoft Revises Privacy Rules, Users Shrug

Microsoft altered its services agreement on Friday to allow the company to combine data about individual U.S. users, for the first time, across multiple Microsoft products and services.

According to the revised services agreement, which was previewed in blog posts and emails to existing users, the revisions will be used by the company to "improve Microsoft products and services," although the company said it won't use the data for the purposes of serving people targeted advertising. The new services agreement covers only free online services from Microsoft--including Hotmail, Outlook.com, and Bing-- not its Outlook software that runs on PCs, or other commercial operating systems or software applications.

Microsoft's move follows a similar shift made earlier this year by Google, which in March consolidated privacy policies across multiple services, including integrating data from users' search history and YouTube viewing.

So far Microsoft's services agreement change appears to have attracted little criticism, compared with Google's move, which quickly provoked outrage, in part because users weren't able to opt out of the changes. Earlier this month, 27 European data protection authorities sent a letter to Google CEO Larry Page, demanding that Google revise its privacy policy to make it clearer to consumers what type of information it collects, how the company uses it, and how users can opt out of having their data combined.

[ For more on the European Union's charges against Microsoft, see Microsoft Faces Formal EU Antitrust Violation Charges. ]

Despite the new services agreement, Microsoft officials said the company's 4,000-word privacy policy, last updated in April 2012, remains unchanged. Furthermore, Microsoft officials have sought to distinguish the revised services agreement from Google's privacy policy consolidation.

"Over the years, we have consistently informed users that we may use their content to improve the services they receive," said Microsoft spokesman Jack Evans in an emailed statement. "For instance, we analyze content to improve our spam and malware filters in order to keep customers safe. We also do it to develop new product features such as e-mail categorization to organize similar items like shipping receipts in a common folder, or to automatically add calendar invitations."

Evans also sought to differentiate Microsoft's use of user data with that of other businesses that run advertising services or exchanges, such as Google. "One thing we don't do is use the content of our customers' private communications and documents to create targeted advertising. If that ever changes, we'll be the first to let our customers know," he said.

Still, while Google has long used content from users' searches or Gmail accounts to deliver more customized advertising, the company said it has privacy protections in place to ensure that private user data remains private. "Ad targeting in Gmail is fully automated, and no humans read your email or Google Account information in order to show you advertisements or related information," read related details published on Google's website.

Regardless, does Microsoft's service agreement revision differ substantially from Google's privacy policy consolidation? "What Microsoft is doing is no different from what Google did," John M. Simpson, a privacy policy watcher with nonprofit group Consumer Watchdog, told The New York Times. "It allows the combination of data across services in ways a user wouldn't reasonably expect. Microsoft wants to be able to compile massive digital dossiers about users of its services and monetize them."

But not all privacy watchers fully agree with that assessment. "There's a qualitative difference between what Microsoft is doing and what Google was doing," said Jeffrey Chester, executive director of the Center for Digital Democracy, speaking by phone. "Google is so dominant, and so clearly using it for targeted advertising--which Microsoft said it wasn't--and that's one reason why it didn't trigger the level of response that Google's changes did."

But he warned that consumers should make no mistake when it comes to what they trade in exchange for using free services, despite any talk of using the collected information to improve products and services. "The overwhelming characteristic of Microsoft, Google, and a few others is to collect and use everything," Chester said. "Because today, through online advertising exchanges, the currency for online marketing is compiling a greater amount of user data on a 24x7, multiplatform basis."

On the other hand, Chester said, Microsoft is due some privacy-related kudos for making Do Not Track active by default with the latest version of its Internet Explorer 10 browser, despite the move earning ongoing rebukes from advertising industry groups. "Microsoft deserves praise for what it did on Do Not Track, and really standing up to advertisers and threats of intimidation," he said.

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