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Posted on October 24th, 2012 in Data Privacy by Simply Security | Be the first to comment | Tags: Data Privacy

Microsoft's updated data collection practices have shined a light on the chaotic privacy landscape.

Earlier in the month, Microsoft was on track to complete a rather unique feat for a company of its size. On October 19, Microsoft managed to quietly institute a series of fundamental changes to its service agreement with minimal resistance. These updates expanded the company's ability to collect and use the personal information of its customers, yet the resultant uproar one might have expected was conspicuously absent at the time of their release.

It ultimately took a New York Times expose and a Congressional response to get to the heart of the matter, but in the process a much broader realization came to the surface. As a result of the lack of standardization and unification in the realm of data protection policy development and enforcement, double standards and unclear expectations are frustrating companies and potentially endangering consumers.

Microsoft goes mining

In the updated Microsoft Services Agreement, users were alerted to the fact that personal information supplied to Microsoft's free, web-based services – including Bing, Hotmail, Outlook.com and Windows Live Messenger – can now be analyzed at a deeper level by the company for the purpose of improving a separate service.

"Over the years, we have consistently informed users that we may use their content to improve the services they receive," Microsoft spokesman Jack Evans explained in a statement to the New York Times. "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 email categorization to organize similar items like shipping receipts in a common folder, or to automatically add calendar invitations."

One thing users did not find in the updated terms, however, was any reference as to whether all of the information being compiled could ultimately be sold to third-party advertisers or used to shape internal campaigns. According to the Times, Microsoft has insisted that it has no plans to do so, and relayed that sentiment to users in a series of emails and blog posts in the months leading up to the changes. However, the language of the actual document leaves plenty open to interpretation.

Double standards

It was not until the Times drew the parallel between Microsoft's policy changes and Google's latest round of privacy updates that data protection advocates realized what could be at stake. Massachusetts Representative Edward Markey was particularly troubled by the "in-depth consumer profiles" being created, demanding a formal response in a letter delivered to CEO Steve Ballmer.

As the Times pointed out, the initially muted response to Microsoft's actions stood in stark contrast to the scathing criticisms launched at Google throughout the year. As the search giant was proactively working to address transparency issues and consolidate its privacy framework into a more user-friendly document, Microsoft even went so far to to take out newspaper ads telling Google loyalists that their digital safety was an afterthought to advertising schemes.

"What Microsoft is doing is no different from what Google did," Consumer Watchdog policy expert John Simpson told the 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."

Nevertheless, according to eWeek, there is little to indicate that watchdogs and regulators will come down with nearly as much force as they have upon Google. After the Federal Trade Commission (FTC) reached a $22.5 million settlement with the search giant for circumventing web browser privacy protections, the Electronic Privacy Information Center (EPIC) went so far as to sue the FTC in the hopes of convincing the agency that mandatory, prescriptive reforms should have been imposed on Google.

However, these discrepancies may have their merits. Although Microsoft's new service terms are not as explicit as they could be, officials insist that they in no way affect the company's central privacy policy or the product-specific corollaries that come with it. Also, Microsoft may have built up a bit of good will with its recent history of privacy leadership. According to the Times, Microsoft's decision to include Do Not Track capabilities in Internet Explorer 10 ran directly counter to monetization interests and infuriated several online advertising firms.

Unsettling realizations

Whether or not the differential treatment of Microsoft and Google is justified, the existence of this gap is concerning in and of itself.

"The difference in the two [privacy controversies] illustrates the confusion surrounding Internet consumer privacy," Times columnists Edward Wyatt and Nick Wingfield wrote. "No single authority oversees the collection of personal information from web users by Internet companies. Though most companies have written privacy policies, they are often stated in such broad, ambiguous language that they seem to allow virtually any use of customers' personal information."

As a consequence of this lack of standardization, consumers must work even harder to fully understand privacy policy formats and the implications of any updates. And the truth is, many simply don't. As the digital arms race continues to look increasingly data-centric, opaque and inconsistent collection practices could be all the more damaging to personal privacy if left unchecked.

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