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SAN FRANCISCO (Reuters) - Microsoft Corp. (MSFT.O) said on Sunday the software maker was taking new steps to protect consumer privacy in the areas of Web search and online advertising and called on the Internet industry to support it.
Microsoft said it was responding to public concern over the recent consolidation of the online ad industry as well as stepped-up interest from government regulators in its call for a comprehensive rather than piecemeal approach to privacy.
"We think it's time for an industrywide dialogue," Peter Cullen, Microsoft's chief privacy officer, said in an interview. "The current patchwork of protections and how companies explain them is really confusing to consumers."
Specifically, Microsoft said it would make all Web search query data anonymous after 18 months on its "Live Search" service, unless it receives user consent to store it longer. The policy changes are retroactive and worldwide, it said.
Microsoft plans to store customer search data separately from data tied to people, e-mail addresses or phone numbers and take steps to assure no unauthorized correlation of these types of data can be made. It also will permanently remove "cookie" user identification data, Web address? or other identifiers.
"Microsoft is going to do a more thorough scrub of customer data once it is too old," said Peter Swire, a law professor at Ohio State University who served as U.S. privacy czar in the 1990s. "Previously, the practice was to do a partial scrub."
As part of Microsoft's push, Ask.com, the Web search business of Barry Diller's IAC/InterActiveCorp IACI.O, has agreed to join Microsoft in calling for the industry to adopt a common set of privacy practices for data collection, commercial use and consumer protection in search and online advertising. Last week, it unveiled AskEraser, a service that will allow Ask customers to change their privacy preferences at any time.
Microsoft's initiatives follow recent moves by Google, the dominant provider of Web searches and the company most under fire by privacy advocates concerned at how rapid advances in search technology may pose unprecedented threats to consumer privacy.
Google set in motion industry efforts to limit how long Web search data is stored by being first to say it will in the future cleanse personal information from its databases after 18 months. Microsoft is one-upping Google by making its move retroactive.
Google has stepped up its own efforts to reach compromises with European Union and U.S. policy-makers in recent months.
The Redmond, Washington-based company said it was taking new steps to notify users how technologies affect them, giving users more specific controls over their privacy and setting tighter limits on how long it keeps search data. It will also minimize the amount of data it collects via its "Live Search" and online advertisement targeting services.
"Search, itself, is a relatively new business and advertising-supported search, and the issues it raises, are also relatively new," Cullen said, adding, "You have almost a collision of these two things."
Both Google and Microsoft face scrutiny from U.S. and European regulators over their plans to merge with major players in the online advertising industry.
Google is seeking approval to buy advertising services firm DoubleClick for $3.1 billion, a move analysts say will more than double the number of Web users to whom it serves up online ads. Similarly, Microsoft plans to buy diversified ad services company aQuantive, a DoubleClick rival, for $6 billion. A shareholder meeting to approve the deal is set for August.
The DoubleClick deal, in particular, faces congressional hearings over the potential privacy issues that could arise from the concentration of data about consumer Web-surfing habits, buying behavior and advertising data.
Forrester privacy analyst Jennifer Albornoz Mulligan says the Internet industry is feeling the heat from customers who are confused by the many conflicting state and federal privacy policies across banking, retail, advertising and elsewhere.
Most consumers haven give up reading the detailed privacy notices contained in footnotes on Web sites because everyone knows that "you can adopt privacy principles without really doing a great job of protecting privacy," Mulligan says.
Cullen said Microsoft did not believe a one-size-fits-all approach to online privacy could work. It wants consumers who seek anonymity online to have the power to do so, while giving customers who prize convenience over anonymity the access to a new class of personalized services that depend on user data.
"People want a high degree of personalization, but they don't want to feel like they are being surveilled," he said.