Microsoft Corp., facing a firestorm of criticism over Passport “Terms of Use” that gave the company control over all content that is transmitted via the Web service, has softened the policy by rewording it.

The terms of use, which were altered late Wednesday, gave Microsoft control of whatever users transmitted “by posting messages, uploading files, inputting data, submitting any feedback or suggestions, or engaging in any other form of communication with or through the Passport Web site.”

Under the old guidelines, Microsoft could “use, modify, copy, distribute, transmit, publicly display, publicly perform, reproduce, publish, sublicense, create derivative works from, transfer, or sell any such communication.” The company also had assumed the right to sublicense such content to third parties, and publish user names in connection with any of the data.

However, a Microsoft spokesman said Thursday morning that those terms had never been exercised, and that the Passport privacy statement – implemented in 1999 – had superceded the terms of use.

“The terms of use were simply out of date for a long time,” Microsoft spokesman Tom Pilla said Thursday morning. “They should have been updated, and we unfortunately were way behind in catching them up to Passport’s stated privacy statement.”

“The privacy statement has always trumped the terms of use,” Pilla said.

The new policy, at http://www.passport.com/Consumer/TermsOfUse.asp, gives Microsoft the right to use customer communications only if the user is communicating with the Redmond, Wash., company:

“By submitting any feedback or suggestions to Microsoft concerning the Passport Web Site or the Passport Service, you warrant and represent that you … are granting Microsoft and its affiliated companies permission to use, modify, copy, distribute, transmit, publicly display, publicly perform, reproduce, publish, sublicense, create derivative works from, transfer, or sell any such feedback or suggestions.”

“This section also is inapplicable to any documents, information, or other data that you upload, transmit, or otherwise submit to or through any Passport-Enabled Properties,” the revised policy stated.

The terms of use for Passport fell under scrutiny after Microsoft unveiled HailStorm, a key ingredient in its .NET initiative. HailStorm will leverage Passport and other Microsoft Web technologies, such as Hotmail, to deliver software services over the Internet.

Despite Microsoft’s contention that the terms of use were irrelevant in light of the Passport privacy policy, users cried foul, claiming the software giant was exerting far too much power over information used in its Internet services.

“And you thought the evil empire of software was not really scheming to take over the Net as a first step to conquering the world!” wrote one InfoWorld reader, in an e-mail titled “Talk about greedy!”



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