Microsoft Beefs up Customer Privacy Policy

Microsoft Corp, under fire for accessing an employee's private Hotmail account to prove he was leaking computer code to a blogger, has said it will now refer all suspicions of illegal activity on its email services to law enforcement.

The decision, announced by head lawyer Brad Smith on Friday, reverses Microsoft's initial reaction to complaints last week, when it laid out a plan to refer such cases to an unidentified former federal judge, and proceed to open a suspect email account only if that person saw evidence to justify it.

"Effective immediately, if we receive information indicating that someone is using our services to traffic in stolen intellectual or physical property from Microsoft, we will not inspect a customer's private content ourselves," said Smith, in a blog post on the software company's website. "Instead, we will refer the matter to law enforcement if further action is required."

Microsoft - which has recently cast itself as a defender of customer privacy - was harshly criticized last week by civil liberties groups after court documents made public in the prosecution of Alex Kibkalo in Seattle federal court for leaking trade secrets showed that Microsoft had accessed the defendant's email account before taking the matter to legal authorities.

The company said last week its actions were within its legal rights under the terms of use of its email services, but has now acknowledged that its actions raised concerns about customer privacy.

The issue is poignant for Microsoft, which routinely criticizes Google Inc for serving up ads based on the content of users' Gmail correspondence.

It has also been campaigning for more transparency in the legal process through which U.S. intelligence agencies can get access to email accounts following the revelations of former National Security Agency contractor Edward Snowden.

"While our own search was clearly within our legal rights, it seems apparent that we should apply a similar principle and rely on formal legal processes for our own investigations involving people who we suspect are stealing from us," said Smith in his blog. "Therefore, rather than inspect the private content of customers ourselves in these instances, we should turn to law enforcement and their legal procedures."