EU examines MS .Net Passport for privacy issues

European data protection authorities concluded this week that Microsoft Corp.’s .Net Passport online authentication system does risk breaching European Union privacy laws, and said that they would continue to study issues raised by the service. E.U. officials did not say that a formal investigation would be launched, however.

Officials from the 15 national data protection authorities (DPAs) met in Brussels on Monday and Tuesday and agreed to the findings of their Internet task force subcommittee, which were drawn up last week.

“The national authorities agreed to look further into .Net passport,” said Jonathan Todd, spokesman on internal market issues at the European Commission. Todd stopped short of saying that a full-blown, formal investigation definitely would be undertaken, however.

“A number of elements of the .Net passport system raise legal issues and therefore require further consideration,” the Internet task force concluded after its initial analysis of the system.

The task force said it was focusing on .Net because it is the most important online authentication system in operation today. It questioned the “value and quality” of the consent given by users to .Net’s operations. It also was concerned by the security risks to people’s data from signing up to .Net.

The national DPAs adopted the Internet task force’s findings and said they would continue to monitor future developments in the field, and especially in Microsoft’s authentication system.

Meanwhile, the next head of the European Commission competition office, Philip Lowe, said Tuesday that the Microsoft antitrust investigation will not conclude before the cases in the U.S. have finished.

Lowe, who takes over as commissioner Mario Monti’s top civil servant on September 1, told journalists in Washington, D.C., that Microsoft is also waiting for an outcome in the U.S. before “talking seriously” to the European Commission.

U.S. District Court Judge Colleen Kollar-Kotelly is expected to reach a decision in the next few months on an antitrust case by nine state attorneys general. In a separate decision, she also will rule on whether a settlement reached by the U.S. Department of Justice and nine other states is in the public interest.

Lowe said he expects the Commission to rule toward the end of this year. Microsoft faces fines of up to 10 per cent of its global sales if the Commission finds it guilty of abusing its dominant position in the market for PC operating systems. It may also be forced to make structural changes to its business practices in order to allay the European Commission’s concerns.

The main concerns are that Microsoft is using its Windows operating system to grab control of related markets, such as the server software market. It also believes Microsoft could be stifling competition by bundling products such as Media Player music and video software into its ubiquitous Windows products.

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