Microsoft will no longer comb user accounts for stolen material belonging to the company, after news of one such search being conducted generated a flood of negative publicity.
Microsoft came under fire from privacy advocates last week after it was revealed [PDF] the company had searched the Hotmail account of Alex Kibkalo, a former employee suspected of leaking trade secrets to a blogger.
Hotmail's terms and conditions had permitted Microsoft to perform such searches under certain conditions, but Microsoft revealed on Friday it had decided to change its policies in response to criticism it received over the case.
Brad Smith, Microsoft's general counsel, said policies for accessing user data will be tightened and it will no longer search its user's account for content it believes to be stolen.
"Effective immediately, if we receive information indicating that someone is using our services to traffic in stolen intellectual or physical property from Microsoft, we will not inspect a customer's private content ourselves; instead, we will refer the matter to law enforcement if further action is required," Smith said.
Smith said while Microsoft was "clearly within our legal rights" to seach Kibkalo's account, the current context of the government mass surveillance as revealed by former National Security Agency contractor Edward Snowden meant it had to re-focus on privacy.
"We've entered a 'post-Snowden' era in which people rightly focus on the ways others use their personal information," Smith said.
Microsoft has also attempted to use what it claims is a more stringent approach to privacy in its marketing against Google.
Last week, the British Advertising Standards Authority cleared an aggressive marketing campaign by Microsoft which stated that Google "scans every word of your emails to sell ads."
The ASA said Microsoft's claims weren't misleading, as its Outlook product only scans for viruses and spam in emails - not the content of the messages, as Google's Gmail does to serve up context sensitive advertising.