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$2 trillion fine for Microsoft security snafu?

Passport passwords passed out

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Microsoft's latest security lapse with its Passport information service could trigger a $2.2 trillion fine on the company courtesy of the US government.

Microsoft on Thursday admitted that a flaw in the password reset tool of its Passport service could compromise the information stored on all 200 million users. It scampered to post a fix and is looking into potential exploits, but the damage to Microsoft may already have been done.

The Federal Trade Commission last year demanded that Microsoft improve its Passport security or face stiff fines of up to $11,000 per violation. Redmond promised to work harder to protect consumer information and launched it's Trustworthy Computing initiative to put regulators' minds at ease.

Well, the FTC is looking into the Passport breach and could slap Microsoft with a fine of $2.2 trillion to cover all 200 million violated users.

"If we were to find that they didn't take reasonable safeguards to protect the information, that could be an order violation," Jessica Rich, assistant director for financial practices at the FTC, told the AP.

The flaw was discovered close to four minutes after security researcher Muhammad Faisal Rauf Danka set to work on Passport. He was able to access Passport accounts at will by typing "emailpwdreset" into a URL that has the e-mail address of a user account and the address where a reset message can be sent.

A number of people claim to have exploited the flaw on their own accounts and those of friends. With permission from their comrades, of course.

Microsoft sent out a warning by 8 p.m. last night and then plugged the hole three hours later.

The company is very upset about the problem, as evidenced by Microsoft product manager Adam Sohn's comment to CNET.

"Whatever," Sohn said.

Actually, he did not say that, but his real remarks were less than compelling.

"You live and learn," Sohn said. "We will obviously take a hard look to make sure that if something is sent through the nonstandard channels, and it is real, we are all over it."

Live and learn? Can we afford to wait for Microsoft to crawl toward secure code or is password security one of those things we should learn to live without? ®

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