The Microsoft Services Agreement allows the company to collect and analyze customer content on its free, web-based products -- email, search and instant messaging -- to improve its other services, The New York Times reported Saturday.
Jack Evans, a Microsoft spokesman, said the update is benign, and the company does not plan to sell the collected data for targeted advertising.
"Over the years, we have consistently informed users that we may use their content to improve the services they receive," Evans said in a statement. "For instance, we analyze content to improve our spam and malware filters in order to keep customers safe. We also do it to develop new product features such as e-mail categorization to organize similar items like shipping receipts in a common folder, or to automatically add calendar invitations."
He said Microsoft does not use private communications and documents to create targeted advertising.
John M. Simpson, who monitors privacy policies for Consumer Watchdog, said although Microsoft has stated in emails and blog posts it won't use the information in targeted advertising, the Services Agreement does not.
"What Microsoft is doing is no different from what Google did," Simpson said. "It allows the combination of data across services in ways a user wouldn't reasonably expect. Microsoft wants to be able to compile massive digital dossiers about users of its services and monetize them."