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ComputerWire: IT Industry Intelligence

Microsoft Corp is closing down its Passport Express Purchase service for MSN Wallet, following scrutiny of US trade officials.

Redmond, Washington-based Microsoft yesterday said Passport Express Purchase would be discontinued next year, enabling Passport to focus on its "core mission".

That mission is "robust, online authentication," the company said in a statement.

The closure comes after Microsoft reached a deal with the Federal Trade Commission (FTC) over Passport. The FTC conducted an investigation into security and privacy concerns, saying Microsoft had misrepresented how secure the service was.

The FTC last month issued an order calling on Microsoft to implement a "comprehensive information security program". The program will be subject to compliance review every two years.

Microsoft did not accept it had violated any laws under the settlement. However, the company said it regretted the fact it did not act sooner and more stringently to protect the privacy of Passport users.

The FTC's order sets out a framework for ensuring Microsoft does not misrepresent Passport's safety and privacy.

The decision to close Passport Express Purchase is seen as an attempt to distance Passport from further, unwanted regulatory concern. Passport is a cornerstone of the company's .NET strategy, positioned as a means for users to sign in to future online services.

A Microsoft company spokesperson said yesterday the aggregation of Passport with online shopping systems was "not attractive" to customers or partners.

As such, Microsoft also announced MSN Wallet. The company said customers currently signed-up to Passport Express Purchase who wish to transition to MSN Wallet must re-register, as data would not be carried over. Data held in Passport Express Purchase will also be destroyed after shutdown - the service will operate until March 2003.

Microsoft said data in MSN Wallet is electronically encrypted and stored in a database on servers that are located in access-controlled facilities. Triple DES is used to prevent unauthorized access to information. Retailers signed up to MSN Wallet include Kmart, OfficeMax, Godiva Chocolatier and Nordstrom.

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