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Source: USA Today

Posted on August 18, 2001

      To avid Web shoppers tired of keying in the same data at every site, Microsoft's Passport "wallet" might seem welcome relief. Open a Microsoft Passport account, key in some vital statistics and credit card numbers, and you can one-click your way to lots of Internet purchases at affiliated Web sites.

      Microsoft isn't the only company pushing in this direction. America Online is working on its own version, as are other firms.

      OK so far. The problem is that in exchange for convenience, these companies can gather detailed information about members. And there's nothing in the law protecting consumers from abuse of this data except the companies' promises.

      How good are those promises? For its part, Microsoft says consumers have nothing to fear. The data it collects from members are held behind impenetrable walls. None will ever be sold. It sounds reassuring. The problem is Microsoft is already falling short on some privacy claims about Passport. If it can't make good on those, why should consumers believe the rest?

      Microsoft says member sites, where visitors can use the Passport wallet to pay for goods, are required to "have privacy policies and follow industry-accepted standards." But many have policies weaker than Microsoft's, and several appeared to violate industry standards, according to a review by USA TODAY of the more than 50 sites where the Passport wallet can be used.

      Some policies:

      -- were difficult to find: The industry standard is for Web sites to post a clear link to a privacy policy on their main page. Almost one in five Passport affiliates didn't, forcing users to hunt around for the policies. One, Bombay, had a "privacy/security" page that said nothing about its data-sharing policy. (When contacted, the company said it "currently" doesn't share information.)

      -- weren't clearly stated : Some Passport-affiliated Web sites made their privacy policies simple and direct. But Hilton.com's policy was 11 pages of dense legalese. Others were equally difficult to understand.

      -- didn't require consumers' consent before data sharing. Microsoft has an "opt-in" policy for data sharing. It has to ask permission before sharing personal information. But many Passport sites had far weaker "opt-out" policies, sharing personal data until the customer tells them to stop. Another problem. Fewer than a third of Passport sites were signed up with WebTrust, TRUSTe or BBBOnline, which review privacy policies and issue seals of approval, although Microsoft claims to encourage members to join.

      -- Microsoft isn't the only tech firm to trip up on privacy. The online industry has for years promised to take privacy seriously. But a May 2000 Federal Trade Commission report found that just 20% had meaningful policies.

      That general lack of concern about privacy grows more worrisome as companies such as Microsoft and AOL start building vast warehouses of data. These companies might think that all consumers need are big, bold promises on privacy as they move to collect more and more data on Web users. Consumers, however, have reason to be wary.

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