However, the company downplayed privacy concerns. For example, Microsoft disputed claims by snooping software watchdog Richard Smith that Windows Media Player 8, which comes bundled with Windows XP, cannot be turned off and poses a threat to privacy because of its tracking capabilities.

Privacy advocates said the media player's capabilities fly in the face of Microsoft's "trustworthy computing" initiative, a new dedication to security and privacy that the company announced last month.

"This is a new level of profiling that I think is dangerous," Electronic Privacy Information Center (EPIC) legislative counsel Chris Hoofnagle told NewsFactor. "Microsoft says it's concerned about privacy, but where is your ability to control information about yourself?"

Watching the Watching

Technical reviews and media reports indicate that Windows Media Player 8 is designed to track which DVD titles users watch on their PCs by contacting a Microsoft Web server and transmitting an electronic fingerprint for the movie and a cookie for the PC.

Windows Media Player also reportedly builds a database of DVD movies and CD music played on a specific user's PC.

In addition, the media player has been criticized for default settings that enable tracking, difficulty in accessing or clearing the database, and an inability to stop the program from contacting Microsoft servers.

Statement Updated

In response to privacy concerns, Microsoft said the media player features aim to allow better navigation of the player and of DVD movies. The company added that its cookies do not contain personally identifiable information and can be cleared or blocked from within the Internet Explorer browser.

And although Microsoft updated its privacy statement for the Windows XP Media Player to refer to the tracking of DVD content, it said the new statement also will specify that "no tracking of user viewing is taking place."

Microsoft denied that any of the information collected by Windows Media Player will be sold, used for direct marketing or stored on the basis of DVD popularity.

Content Consequences

EPIC's Hoofnagle said history shows that tracking the content individuals consume can have political consequences. He claimed the Windows Media Player technology marks a troubling trend from a privacy perspective.

"This will be the first of many realizations that software is being written so it can log content consumption," he said. "We're just coming on the brink of this."

Referring to required linkage to Microsoft Passport, which also has come under fire from privacy advocates, Hoofnagle said he is worried that users will be required to allow data collection and will not have control over the content with which they are associated.

"Currently, they're associating you with content," Hoofnagle added. "Down the road, it will be a means to charge as well as profile individuals based on their content habits."