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Microsoft agrees to EU demands — as long as Google and Yahoo do too

SEATTLE (Bloomberg) — Microsoft Corp. said it wants Google Inc. and Yahoo! Inc. to agree to European demands to cut the time they keep users' search-engine records before it does the same.

While Microsoft is able to meet the requirements, it wants to wait until its larger search rivals get on board, Brendon Lynch, the company's director of privacy strategy, said yesterday. A group of European Union officials called the Article 29 Data Protection Working Party have asked search engines to purge their user records after six months.

"The proposals are feasible, but we want them to be adopted industry-wide," Lynch said. "If Microsoft alone adopted the recommendations of the Article 29 Data Protection Working Party, it wouldn"t have a broad impact on its users in Europe because our market share is so small."

Shortening the length of time that search engines keep such records could eat into advertising revenue, the main source of sales for Google and Yahoo. The companies rely on users' queries to target advertising more specifically. That's raised privacy questions, since search engines keep track of exactly where customers go online and what they read and buy.

Search-engine providers that retain online search data for longer than six months break EU privacy laws, the Article 29 group said in April. The association is made up of data-protection officials from the 27 EU nations and from three non-EU countries, including Norway. Google cut the length of time it keeps data to nine months in September, from 18 months.

Microsoft, the world's biggest software maker, said in July 2007 that it would remove identifiers from individuals' search data after 18 months. That same month, Sunnyvale, California-based Yahoo said it would adopt a 13-month cut-off.

"We are prepared to meet the working party"s guidelines, but we believe it"s imperative for all search engines to adopt the same as stated," Lynch said yesterday. "Running a search engine is a very costly business."

Both Microsoft and Yahoo trail Mountain View, California-based Google in European Internet search traffic. Google has almost 80 percent of the market, while Microsoft and Yahoo together account for about four percent, according to research company ComScore Inc.

Microsoft, which expects to meet with EU data-protection officials this week, plans to say that the group"s decision to impose a six-month limit was correct, but that it should apply to the whole industry, John Vassallo, vice president for European affairs and associate general counsel, said by telephone.

Google's decision in September to keep user records nine months, instead of 18, isn"t enough to meet EU data protection rules, the Article 29 group said in April.

"Despite some progress, significant work must still be carried out to guarantee the rights of Internet users and to ensure the respect of their privacy," the group said in a statement posted on its website. "In this perspective, the Article 29 Working Party will lead hearings with Google to discuss the points of dissension."

The Article 29 group said it will have hearings with all the search engines in February 2009.

"We will continue to work constructively with the authorities," Peter Fleischer, Google"s lawyer in charge of privacy matters, said in an e-mailed statement.