By D. IAN HOPPER AP Technology Writer
Wednesday, February 20, 2002 8:19 p.m. EST
WASHINGTON (AP) - Microsoft's new version of its popular Media Player software is logging the songs and movies that customers play.
The company changed its privacy statement Wednesday to notify customers about the technology after inquiries from The Associated Press.
The system creates a list on each computer that could be a treasure for marketing companies, lawyers or others. Microsoft says it has no plans to sell the data collected by Media Player 8, which comes free with the Windows XP operating system. The company said last month it had sold more than 17 million copies of Windows XP.
"If you're watching DVDs you don't want your wife to know about, you might not want to give her your password," said David Caulton, Microsoft's lead program manager for Windows Media .
The media player has been bundled as a free addition to Windows for several years and allows users to play music CDs, DVD movies and digitally stored songs on their computers.
When a CD is played, the player downloads the disc name and titles for each song from a Web site licensed by Microsoft. That information is stored on a small file on each computer in the latest version of the software.
The new version released with Windows XP last fall also added the same technology for DVD movies.
Microsoft's original privacy statement informed customers that they were downloading the information about CDs but never stated it was being stored in a log file on each computer.
The new statement makes clear that information is being downloaded for both DVDs and CDs, but does not explain how users can eliminate or get into the log file.
"It definitely could have been clearer and more specific about DVDs," Caulton said.
Clearing the list of songs and movie titles would cripple Media Player. Stopping the program from collecting any more information would mean changing the software's settings, but that would disable Internet broadcasts.
As part of downloading the information about songs and movies from the Web site, the program also transmits an identifier number unique to each user on the computer. That creates the possibility that user habits could be tracked and sold for marketing purposes.
Privacy experts said they feared the log file could be used by investigators, divorce lawyers, snooping family members, marketing companies or others interested in learning about a person's entertainment habits. It also could be used to make sure users have paid for the music or movie, and have not made an illegal copy.
"The big picture might be the owners of intellectual property wanting to track access to their property," said Peter Swire, a law professor at Ohio State University.
Microsoft said the program creates the log file so a user does not have to download repeatedly the same track, album or movie information. The company said the ID number was created simply to allow Media Players users to have a personal account on the Web site dealing with the software.
Neither is sold or shared with others, and no information is collected on Microsoft's servers that would be personally identifiable, officials said.
"This is essentially a case where it (the ID) doesn't serve any purpose and it isn't used," Caulton said.
Jonathan Usher, another Windows Media executive, said Microsoft has no plans to market aggregate information about its customers' viewing habits, but would not rule it out.
"If users tell us that they want the ability to get recommendations, that's something we could look into on the behalf of users," Usher said.
In a recent memo, Microsoft chairman Bill Gates ordered his company to check for privacy and security concerns before adding new features.
"Users should be in control of how their data is used," Gates wrote. "Policies for information use should be clear to the user. Users should be in control of when and if they receive information to make best use of their time."
Privacy researcher Richard Smith , who researched how Media Player stored and transmitted the information, questioned why the program has to give chapter information for DVDs at all because almost all discs have chapter listings in an interactive menu within the movie.
He said the feature seems to conflict with Gates' directive.
"You can really see the Microsoft culture coming through that Gates wants to change. These guys are digging in their heels," he said.