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Passport Control
Microsoft, FTC reach privacy settlement
Microsoft on Thursday agreed to make sweeping changes to its Passport authentication system as part of a settlement agreement with the Federal Trade Commission.
The settlement addresses allegations that Passport collects too much information, uses unfair or deceptive practices, and fails to adequately protect the privacy or security of personal information, particularly of children.
The FTC's investigation and settlement came in response to a series of complaints made against Passport last summer, said agency chairman Timothy Muris.
Passport is Microsoft's online authentication system, which allows customers to use single sign-in to access multiple Web services.
The idea behind Passport is simple: Microsoft would collect and store an ID, password and other personal information such as a shipping address or credit card number.
This electronic "wallet" would travel around the Web with a consumer, making it easier to engage in a range of online transactions, such as banking, making travel plans or subscribing to an online publication.
The service also is a cornerstone for .Net, Microsoft's slowly evolving Web services strategy.
But critics have assailed the plan on several fronts, particularly privacy and security, and the FTC on Thursday agreed on some points.
As part of the settlement agreement, Microsoft has changed its privacy statements to accurately reflect what information is collected and how it is used, Brad Smith, Microsoft's general counsel, said in a separate conference call.
Passport rejected A group of privacy organizations, including EPIC and Junkbusters, filed a complaint in July 2001, alleging Passport and the accompanying Wallet service violated Section 5 of the Federal Trade Commission Act.
As part of the settlement, Microsoft has agreed to make numerous changes to tighten up how much information it collects or what it tells consumers about how information will be used.
In an eight-page settlement (in pdf)released Thursday, Microsoft also agreed not to engage in unfair or deceptive practices and to protect the security and privacy of personal information.
The FTC's privacy complaint focused on a single issue: Microsoft's collecting of very detailed information from people's sign-in information and the Web sites onto which which they logged on without notifying customers of the activity.

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