Microsoft Admits To Privacy Problem

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March 12, 1999 (4:39 PM EST)

By Andy Patrizio,

Although Microsoft admitted to a privacy violation, the software giant said it did not keep or use the information gathered.

The company was first exposed last week by Richard Smith of Phar Lap Software, who found the Windows 98 Registration Wizard, or RegWiz, was installing unique identification numbers on the computers. Those IDs were transmitted to Microsoft.com during registration, Smith said.

Windows Magazine reported that not only is information on the user's system sent to Microsoft.com, but it's also possible for any website to read and change that information without the user ever knowing it.

Microsoft officials said any data sent to the Microsoft server is not recognized as a valid transaction and is thus discarded. So, no personal data sent to Microsoft actually makes it into any Microsoft database.

That said, the company is eliminating the offending code. The company's website was given an overhaul on Thursday, and one of the steps was to stop receipt of hardware IDs from product-registration wizards. The company will also make sure the Windows 98 Registration Wizard doesn't even generate these IDs, effective in the next service pack.

It will also provide a tool for download to delete the hardware ID from the Windows registry. Finally, the company said it plans an internal check to make sure none of the collected information has been kept.

Microsoft's explanation, that this is a bug, struck one analyst as an "I didn't inhale" defense.

"I have to say I'm in awe of Microsoft's ability to not know of that function in Windows 98, if it is a bug as they claim," said Dwight Davis, an analyst with Summit Strategies and former editor of Windows Watcher, a newsletter that covered the company.

Speculation that Microsoft was gathering this type of information was in circulation even before Win 98 was released last year. So, for the company to not know about it until now is hard to swallow, Davis said.

"If it's true they didn't realize this was happening, it says terrible things about Microsoft's oversight of its own products," said Davis.

Davis said he doesn't believe this problem will hurt Microsoft with regard to its current antitrust legal battle. He also believes Microsoft's statement that the company has not done anything with information it gathered. Except perhaps to get a profile of the PC market and what configurations are out there, Davis said.