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Pressure on Microsoft is rapidly mounting over the way it plans to incorporate Internet services into its upcoming Windows XP operating system. In addition to the antitrust suit by the Department of Justice and state attorneys general and the planned congressional hearings into the company’s practices, the Federal Trade Commission might have to weigh in. On Thursday, an alliance of consumer-privacy watchdog bodies filed a complaint with the FTC raising privacy and security concerns, and accusing Microsoft of “unfair and deceptive trade practices.” The complaint focuses on the integration of Windows XP with a centralized identity-authentication service called Passport. The complaint asks for an FTC investigation of the way Microsoft intends to collect personal information of users of Windows XP and related services. According to Marc Rotenberg, executive director of the Electronic Privacy Information Center, one of the lead plaintiffs, the filing requests an injunction “to stop the release of XP” pending the outcome. This latest turn of the screw raises more doubt about the Redmond, Wash.-based software behemoth’s ability to ship XP on schedule in October. “Time has become of the essence,” Rotenburg said. Although not directly related to the antitrust suit, the complaint draws on the ruling in that lawsuit, which found Microsoft to be a monopolist. A copy of the complaint to the FTC will also be forwarded to the Department of Justice and the state attorneys general involved in the antitrust suit. “It is Microsoft’s monopoly power in the operating system market that allows it to coerce from consumers personal information that they would not otherwise volunteer,” said Jason Catlett, president of Junkbusters, another of the complainants. In a conference call Wednesday, Rotenberg and Catlett, along with Privacy Foundation CTO Richard Smith, outlined the substance of their complaint. It alleges that Microsoft’s plans for Windows XP violate Section 5 of the Federal Trade Commission Act. “This complaint concerns the privacy implications of the Microsoft XP operating system that is expected to become the primary means of access for consumers in the United States to the Internet,” the document begins. “Microsoft has engaged in and is engaging in unfair and deceptive trade practices intended to profile, track and monitor millions of Internet users.” It goes on to detail privacy issues with Microsoft’s .Net initiative for integrating Web services with its products and, in particular, the plan to link those services through Passport. Currently, consumers browsing the Web are often tracked by the sites they visit through the use of cookies, small pieces of code that record a user’s movements. The cookies are stored on a user’s machine and inspected on subsequent visits to the same site. By contrast, the Passport system stores such information, including passwords and personal data, on central Microsoft servers. Microsoft’s rationale for this centralization is its vision of a highly connected world with users accessing Web services not only from their PCs, but from devices such as handheld computers, phones and game consoles. Such a vision requires that authentication be tied not to a specific machine, but to the user, accessible through the “Internet cloud” from any device. Users already experience this when they use Web-based e-mail. Microsoft wants to expand that model to encompass almost everything on the Net, including access to Web sites and e-commerce. The promise is convenience. The danger is that if the monopoly of the Windows desktop is leveraged to make Passport a universal identifier on the Internet, Microsoft becomes the middleman for most Internet transactions. Privacy groups are not alone in worrying about that danger. “[Microsoft is] not trying to control people,” said Esther Dyson, chairman of EDventure Holdings and founding chairwoman of the domain-names organization ICANN. “They’re just trying to get money out of people’s pockets.” Dyson described the Passport design as “a brilliant business plan” but also “a scary notion.” “I don’t want the government, or Microsoft, asking me for my ID,” she said. Dyson considers Passport an aggressive move at this juncture in the antitrust case. “I find it kind of amazing,” she said. “You sit and think, ‘Can they actually do this? Is it believable?’ One hopes not.” In response to the announcement of the complaint to the FTC, Microsoft spokesman Jim Cullinan insisted that the company’s design of Passport leaves users in control of their personal information. “The user is the one who controls how and with whom their data is shared,” said Cullinan, who added that a user may currently sign up for Passport by inputting nothing more than an e-mail address and a password. Cullinan argued that Windows XP requires Passport only when someone uses a feature, such as instant messaging, that requires authentication. “That’s to protect the user,” he said. “So that only you have access to your buddy list or your Hotmail e-mail messages.” The privacy complaint to the FTC calls for investigation of a long series of related services and products. Those include the tie-in between Windows XP and Passport; the Hotmail e-mail service; the sharing of information within the Microsoft network; the harvesting of e-mail addresses; and the profiling of Internet users. Current beta versions of the XP operating system require the user to register for a Passport for full functionality, specifically for access to real-time communications features such as chat, instant messaging and videoconferencing. Catlett demanded that Microsoft redesign its services so that the disclosure of personal information would not be a requirement. “There should be warnings akin to a cigarette-package label,” he added. “Your information may be inadvertently disclosed to third parties because of our inadequate security procedures.” Catlett referred to the history of security breaches with Microsoft network systems as “a long, sad saga of errors and defects.” This, he suggested, raised doubts about the wisdom of centralizing user data in this way even assuming good faith. Microsoft has offered repeated promises that it would neither mine the Passport data for marketing purposes nor share it with anyone else. Microsoft is due to ship final XP code to computer makers next month. With preliminary settlement talks in the government’s antitrust suit barely under way and congressional hearings scheduled for September in the Senate Judiciary Committee, the FTC complaint opens one more front for Microsoft. Related Articles from The Industry Standard: Microsoft to Face Congress Senator Calls for XP Hearings Sun, HP Open Code to Developers Copyright � 2001 The Industry Standard

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