TELECOM Digest OnLine - Sorted: Microsoft Piracy Check Draws Privacy Complaints

Microsoft Piracy Check Draws Privacy Complaints

Allison Linn, AP (
Mon, 07 Aug 2006 01:09:54 -0500

by ALLISON LINN, AP Business Writer

When Microsoft Corp. said it planned to begin checking for pirated
copies of its Windows operating system using the method it set up to
send people security fixes, even some of the company's traditional
critics could sympathize.

After all, although Microsoft rakes in billions, piracy of its
flagship products remains a huge, costly problem, particularly in
developing countries such as China and Russia. The Business Software
Alliance estimates that 35 percent of software installed on PCs
worldwide is pirated.

Nevertheless, 18 months after announcing the Windows Genuine Advantage
piracy check, Microsoft faces controversy and backlash, including two
lawsuits. Some say the company clumsily handled several elements of
the program, including a key privacy issue.

"They have a right to say, 'If you want patches from Microsoft, you
know, you should let us make sure you're not running a pirated copy of
Windows,'" said Gartner analyst John Pescatore. "That's a valid claim,
and with the Windows Genuine Advantage tool, I think, they tried to go
a little too far."

Microsoft introduced the piracy check in mid-2005 as a condition for
downloading security fixes and other software, such as anti-spyware
technology, from its Web site.

Now the anti-piracy check is also being sent to customers whose
computers receive security updates automatically. For now, users can
take extra steps to opt out of the piracy check. But Microsoft
strongly encourages people to run it, calling it a "high priority
update," and says the check might become mandatory at some point.

Once installed, the program checks whether it believes the user's
version of Windows is legitimate. It gathers information such as the
computer's manufacturer, hard drive serial number and Windows product

Microsoft still offers important security fixes even if the company
alleges the version of Windows is pirated, although those users can't
get non-security downloads, such as a test version of the new Internet
Explorer browser. Those users also receive a barrage of notices that
they are running an illegal copy of Windows.

While Microsoft had told users the new software would gather
information related to piracy, some people became alarmed when they
discovered that the software also was performing a daily check-in with
the company.

Microsoft said the daily "call home" was a safety measure designed to
let the company shut the program down quickly if something went wrong.
But critics saw the undisclosed communications as a breach of privacy
and trust.

Marc Rotenberg, executive director of the Electronic Privacy
Information Center, said the concern is that users did not know about
or control the interaction.

"It feels very much like a digital trespass you know, someone is
getting access to your system without your consent," he said.

Microsoft conceded that it should have told users it was making the
daily connection. It has since discontinued the daily check and
revised its disclosures. The system will, however, continue to
occasionally check in with Microsoft to make sure it still believes a
person's software is legitimate.

Even so, although many had sympathized with Microsoft's original
anti-piracy efforts, to some this misstep was enough to call into
question the entire program.

"To use the security mechanism to install marketing software that is
designed to increase Microsoft's revenue but actually interferes with
some people's use of their PCs is a real breach of faith with
customers," said Brian Livingston, editor of Windows Secrets, a
newsletter and Web site that offers tips for using Microsoft software.

He thinks the episode will have a long-term, negative effect on how
well people regard the software maker.

"The trust has been broken," he said.

Microsoft faces two federal lawsuits over the software, both of which
accuse the company of violating laws that seek to combat spyware. The
lawsuits seek class-action status.

Microsoft spokesman Jim Desler insists the piracy check is not spyware.

"These lawsuits are without merit and they really distort the
objective of our anti-piracy program," he said.

Pescatore, the Gartner analyst, said he thinks Microsoft has found a
good middle ground by backing off on the daily checks, and he doesn't
think most users will be affected by the controversy.

But for those who were already suspicious of Microsoft, this adds more

"I definitely think that there's paranoia; would argue
unwarranted paranoia," said Russ Cooper, a security researcher at
Cybertrust Inc. who approves of the privacy check.

Microsoft has taken great pains to improve its privacy policies since
it came under intense fire about five years ago for a system called
Passport that sought to store all sorts of personal information under
one log-on. The program was scaled back considerably and, despite some
ongoing concerns, Rotenberg said Microsoft has come to play a leading
role in privacy issues.

"Since that time you can say simply, they got privacy religion,"
Rotenberg said.

But he thinks Microsoft has misstepped with the piracy check, and
should separate it from the system for sending security updates.

Because the piracy check isn't mandatory -- for now at least --
Microsoft is using incentives to try to get people to download it. One
short-lived offering, called Private Folder, gave people a special
place on their computers to password-protect data they didn't want to
share with family members or co-workers. The company was forced to
pull that product amid complaints that the secret folders would create
headaches for corporate technology experts trying to manage big
computer systems, and raise other problems if consumers forgot their
passcodes and couldn't get at their data.

Despite such flubs, Microsoft appears if anything to be redoubling its
commitment to crack down on illegal Windows copies, part of a larger
push to increase profits from the highly lucrative franchise.

Microsoft takes legal action against those it believes are
distributing pirated copies and it says it has used data from the
piracy check to help track down some sellers. The company also is
working with government officials in places like China to try to make
piracy less acceptable.

But in a meeting with financial analysts in late July, Microsoft also
made clear it is counting on the individual check as part of its
overall bid to grow sales by slashing piracy.

Kevin Johnson, co-president of the Microsoft division that includes
Windows, said: "We're really trying to amplify the fact that being
genuine enables a set of benefits and value."

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Copyright 2006 The Associated Press.

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