Microsoft Internet Changes Examined by EU Regulators

Microsoft Corp. (MSFT) faces a preliminary investigation by European data protection regulators who are examining potential privacy issues raised by changes to policies for Internet products including Hotmail and Bing.

Updates to Microsoft’s services agreement, which took effect Oct. 19, are being reviewed by Luxembourg’s data protection commission in collaboration with other European Union privacy regulators, said Gerard Lommel, president of the Luxembourgish agency.

U.S. companies sometimes run afoul of privacy concerns in Europe, where rules protecting individuals’ data are stricter than in America. Data protection authorities in the EU earlier this month urged Google Inc. (GOOG) to address concerns about its privacy policy.

“This investigation is not at the same level as the probe concerning Google was a few months ago when it changed its privacy policy, where clear privacy issues had been identified,” Lommel said in an interview today. Potential issues with Microsoft’s upgrade “can neither be excluded nor confirmed.”

The goal is to check whether the amendment to Microsoft’s policies could entail new risks for users’ privacy. The examination is also checking whether Redmond, Washington-based Microsoft’s privacy policy meets European standards on notice and choice of services, Lommel said.

Services Agreement

Robin Koch, a spokesman for Microsoft in Brussels, said the changes don’t alter the company’s existing privacy policies.

“We recognize we could have been clearer about this when we rolled out our updated services agreement,” Koch said in an e-mailed statement. “We will update the agreement as soon as possible to make that point absolutely clear.”

Data protection is currently policed by separate regulators across the EU. As part of an overhaul of the union’s 17-year-old rules on the issue, its executive body wants to simplify the system so companies deal with only one regulator in the region.

The Luxembourg commission, in close cooperation with the French and other European data protection authorities, is examining the policy in this case because Microsoft’s service agreement with users falls under Luxembourg law, said Lommel.

Facebook Inc. (FB), which has its European base in Ireland, earlier this year was subject to an audit by the Irish data protection authority into privacy issues with its facial- recognition feature. France’s National Commission for Computing and Civil Liberties, or CNIL, led the probe into Google’s new privacy policy, announcing last week that the company must fix flaws in the update or face possible fines.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.