Privacy Groups Urge FTC to Delay Windows XP

Executives at Microsoft are counting down the days until the release of the Windows XP operating system, but the company's foes and competitors are increasing their assault, threatening to delay an October launch. These critics say Microsoft's plans to bundle applications and services tightly with the software is anticompetitive and threatens users' privacy.

Privacy groups said Wednesday they will file a complaint with the U.S. Federal Trade Commission alleging that Microsoft's Passport authentication service, which is included with the new operating system, violates the FTC's unfair and deceptive trade practices statute. The groups argue that Microsoft is effectively forcing consumers into storing their personal information with the company.

Additional Complaints

The privacy complaint comes one day after New York Democratic Senator Charles Schumer asked Congress to investigate Microsoft's plans to bundle its media player and instant messaging application with Windows XP. During a press conference Tuesday, Schumer said he would also lobby to win an injunction to delay the October 25 release of Windows XP.

Microsoft responded to the latest string of criticism by noting that it is pursuing negotiations with the U.S. Department of Justice and 18 state attorneys general, though it remains embroiled in a legal battle over the ongoing antitrust case, Microsoft's President and Chief Operating Officer Rick Belluzzo told reporters Tuesday in San Francisco.

"The discussions with the Justice Department are really front and center," he said, following a keynote speech at a broadband conference hosted by the Cable and Telecommunications Association for Marketing, a trade group representing the cable television industry.

He added that the company remains confident that its latest concessions to allow computer manufacturers to sell space on the Windows desktop puts it in good standing with the law. "We feel like it's a very inclusive product," Belluzzo said.

Passport Problems

The latest privacy concerns have more to do with consumer advocacy than competitive issues, according to Jason Catlett, president of Junkbusters, a for-profit privacy advocacy and consulting group among the organizations filing the claim with the FTC.

"We're focusing mainly on Passport, but it's unclear how all these moving parts are going to fit together," Catlett says. "There are very significant competitive issues associated, but we're focused on the privacy."

Microsoft's Passport allows Internet users to use one password and sign in to gain access to a variety of online services. One of the company's Web services, and part of the company's Hailstorm services scheme, Passport stores a user's personal information, including address and payment information. Microsoft currently uses Passport with its free e-mail service, Hotmail.

Joining In

Along with Junkbusters, the Privacy Foundation and the Electronic Privacy Information Center are heading up the FTC complaint, which Catlett expects to be filed Thursday. Catlett says the three groups expect to announce more organizations taking part.

The groups are pursuing concessions from Microsoft that would prohibit the company from "stating or implying that registration is required," Catlett says. Actually, users are not required to enter their personal information when signing up for Passport, according to the complaint. "They can use this product anonymously," he says.

Junkbuster isn't new to the issue of privacy concerns related to Passport-like systems. Catlett wrote a report in 1999 on privacy and competitive issues associated with authentication services, such as Microsoft's Passport.

"The issue is the same today--Microsoft can use its monopoly power to effectively compel consumers to disclose identity," Catlett says.