It all has to do with their WGA, or Windows Geniune Advantage. Everyone who has a Windows OS has probably stumbled into this, but what they might not know is that it will always phone home to Microsoft, no matter if you accept or cancel the installation. The purpose of this is to fight piracy, but some are calling it a breach of privacy.
Microsoft has admitted that the latest update to its Windows Genuine Advantage program will phone back to Redmond even if the user clicks cancel.
WGA is meant to help Redmond fight piracy, but has been criticised on privacy grounds and because previous versions have incorrectly labelled people with genuine software as pirates.
But if you cancel the installation of WGA, maybe because you dislike the privacy implications, the software will still phone home. Microsoft stresses that WGA does not take any information which could identify you as an individual, but is only used to collate statistics on WGA use.[more]

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