The European Commission (EC) announced this morning that Microsoft will "radically" change Microsoft Passport, the company's online authentication and eWallet service. Because of the changes, Microsoft won't face sanctions in Europe, where privacy and security regulators have been investigating Passport. Also, the changes will help Passport conform to the strict data-protection rules European Union (EU) countries require.
"Microsoft has agreed to implement a comprehensive package of data-protection measures, which will mean making substantial changes to the existing \[Passport\] system," the EC wrote in a statement. "There would not seem to be any reason to take any form of sanctions against the company," an EC spokesperson declared. "My understanding is that the member states' authorities are now all satisfied that the system will be adapted to the requirements of EU data-protection legislation as reflected in their own national legislations."
Although details about the changes are forthcoming, the commission says that Microsoft agreed to change Passport's personal "data-information flow," ensuring that Passport users will receive more information about how Microsoft is using their data and a wider range of choices to control that use. "The concern has been that users of the system should know what the data that they are providing about themselves can be used for," the EC spokesperson said. Also, because Microsoft uses Passport to store critical information such as credit card numbers, the company will add extra safeguards to further ensure that personal data doesn't fall into the wrong hands.
The EC will continue to examine Passport and similar services (e.g., AOL Time Warner, the Liberty Alliance) because of their ever-evolving nature. The EC noted that it's still concerned about other outstanding Passport-related issues, including electronic advertisements in Hotmail. Also, the EU is still conducting a wider and separate antitrust investigation of Microsoft's server and media-player products. A ruling in that case is expected within a few months.