Microsoft's Defense Initiative: Privacy-Enabled Windows

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Microsoft Corp., Redmond, WA, caught industry and government leaders off guard yesterday with the sudden announcement that its next software version of Windows, code-named "Whistler," will be the first operating system to include privacy-enabling technologies based on the so-called "P3P specification."

Microsoft made the announcement in New York during the World Wide Web Consortium's Platform for Privacy Preferences (P3P) Interoperability Session. At that time, the company said its new software could be expected in 2001 and that it would contain the Microsoft Internet Explorer browser product.

Commenting on the news, Steve Ballmer, Microsoft's president and CEO, said the Internet was becoming more and more a part of daily life and the company realized that consumers considered it critical to be able to control their personal information online.

"Our commitment to protecting consumer privacy through technologies based on P3P and other efforts stems from Microsoft's longstanding focus on building technology that empowers the individual," said Ballmer.

He said the new protocol will "provide a standardized, automated way for consumers to compare their individual privacy preferences with the privacy practices of the Web sites they visit."

But two leading privacy advocacy groups, the Electronic Privacy Information Center, Washington, and Junkbusters, Green Brook, NJ, strongly disagree.

The groups released a report on the same day entitled "Pretty Poor Privacy: An Assessment of P3P and Internet Privacy." The report concludes that "P3P fails to comply with baseline standards for privacy protection. It is a complex and confusing protocol that will make it more difficult for Internet users to protect their privacy."

Indeed, though Microsoft has been working with various companies and advocacy groups over the past several years to determine the best approach for implementing P3P, the timing of the company's decision to go forward with the technology has raised some eyebrows.

"This may well be a half-baked program designed to create the appearance of something that benefits consumers but, in the long run, keeps them positioned as a monopoly," said Ronald T. Perrella, CEO of, Laguna Nigel, CA.

PrivacyCharge, an Internet start-up, promises to offer direct marketers the ability to take online credit card orders from consumers without requiring their full account numbers. And even though Microsoft's new technology may eventually provide unique interfacing opportunities for the company, Perrella isn't buying it.

"I think what they are doing is throwing as much out there as they can to create as much good will as possible with the public and the government," said Perrella.

"I'm not so sure consumers are going to be willing to go through all the gymnastics just to determine what they want to have revealed or not revealed to companies over the Web."

Perrella also said Microsoft has yet to alleviate consumers concerns about security despite enhancements to the operating system with regard to privacy.

Chris DeStefano, president/CEO of Hybrinet Inc., Newark, NJ, a company that develops and markets integrated e-commerce solutions had mixed reactions as well.

"I believe it will hinder certain companies from [fully realizing] some of their acquisition goals, but it won't directly affect the way our product is structured. But I think it's obvious to everyone in this industry that at some point privacy issues were going to have to be addressed.

"It's going to have an impact on certain companies abilities to acquire customers, but as an industry we have to face the fact that consumers are weary and tired of being told that they are being profiled over the Web."

But John Osborn, executive vice president and director of integrated marketing at BBDO New York, said he doesn't believe Microsoft's new technology is going to create insurmountable problems for marketing clients or their customers.

"Marketing has always been about overcoming challenges and serving consumers. And in the end, it's always going to be about creating more choices for consumers. Consumers are always going to appreciate having the opportunity to see their choices further extended by this medium."

It's unclear whether or not Microsoft had any choice other than to proceed with its privacy-enabled protocol announcement given the company's antitrust problems with the government this past year.

But consumer groups were quick to point out that as Microsoft was touting consumer privacy on the East Coast, the nation's attorneys general were meeting on the West Coast for their summer conference in Seattle where every session's focus was on privacy or its direct relationship to emerging issues in healthcare, telecommunications, technology and law enforcement.

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