Microsoft Case Study
"Microsoft has been a leader and active participant in the 'layered' privacy notice initiative, with MSN being one of the first sites to adopt this approach. We believe that the layered privacy notice represents a significant step forward in the area of privacy disclosures and will make it much easier for users to understand a company's privacy practices and to make informed decisions.
"Companies, especially those that operate across multiple jurisdictions, face numerous, overlapping obligations to include a great deal of detail in their privacy statements. These obligations stem from specific regulatory requirements that specify items that must be included; industry standards, including those of privacy seal organizations; and a general desire to avoid accusations of being incomplete or misleading by omission. An unfortunate result of the efforts to meet these obligations and to provide complete and accurate notice is that websites now commonly have privacy statements that are long and difficult to understand.
"The 'layered' privacy notices is designed to bridge the competing pressures between completeness and ease of use. Under this approach, a one-page short privacy notice, designed to be consumer-friendly, with simple language, and an intuitive lay-out, will provide consumers with essential privacy information, to supplement the traditional longer privacy statement. Moreover, a common template for communicating privacy information will allow consumers to compare and understand privacy practices, much as a common lay-out for food labels has helped all consumers make informed decisions about the food we eat.
"The success of the layered notice project requires collaboration among government, business and consumers. A resolution supporting layered notices was adopted at the 2003 Sydney International Data Commissioners' Conference. And in June 2004, the European Article 29 Working Party adopted a statement that it 'welcomes the efforts to develop a standard for comprehensible data protection information [and] encourage[s] the institutions and companies involved to continue their tasks.' Microsoft and our industry partners will continue to work with governments as we move forward with this exciting initiative.
"The layered privacy notice initiative is also based on consumer research. The Center for Information Policy Research gathered existing research and conducted additional consumer focus groups in the U.S. in 2002-03, which helped establish the form and content of the common template. In the summer of 2004, MSN conducted additional consumer research in Germany and Hong Kong, to test MSN's proposed local-language short privacy notices. Not surprisingly, the research has clearly shown that U.S., German, and Hong Kong consumers all prefer the simple language and transparent lay-out of layered notices to the complexity of long privacy statements.
"Of course, there are issues that still need to be resolved, in the course of an on-going dialogue among government, business and consumers - in particular how to agree on a common worldwide template, given the divergences of some aspects of privacy laws from country to country. We believe those issues are best-resolved when dialogue is supplemented by experience in the marketplace.
"Microsoft is proud to be in the leadership in launching layered notices, as we look forward to collaborating further with government and business partners in this initiative. In the long run, we believe that consumer trust in the Internet itself will be heightened, as consumers are presented with more comprehensible privacy information."