Original URL: http://www.theregister.co.uk/2006/07/07/wga_disadvantage/

Windows genuine disadvantage

A step too far?

By Mark Rasch

Posted in Applications, 7th July 2006 11:19 GMT

Comment A recent lawsuit filed against Microsoft should have all companies reexamining their privacy policies to determine what information they are actually collecting about customers and what they can possibly do with it.

What would you call a computer program that surreptitiously installed itself onto your computer, collected personal information about you without your knowledge or effective consent, was difficult or impossible to remove, installed pop-up banners that constantly harassed you, and presented significant security vulnerabilities?

If you were Los Angeles resident Brian Johnson, the answer would be simple. You'd call it Windows. Or more specifically, it's the anti-piracy software download known as Windows Genuine Advantage.

His class action lawsuit (PDF court documents available in linked article), filed in US federal District Court in Seattle, Washington on June 26, 2006, alleges that the Microsoft software violates California and Washington State privacy laws, consumer protection laws, and anti-spyware laws.

The outcome of the case may well dictate how companies package software, and more particularly how they promise privacy. This will apply not only to software companies, but also to any company that, either knowingly or not, collects certain "personal information" about visitors to its websites.

Genuine advantage?

In April 2004, with much fanfare, Microsoft announced a new program to protect the consumer from...well, from themselves. Ostensibly an anti-fraud program, the Windows Genuine Advantage (WGA) program was marketed as a means for individuals to determine whether the software on their system (that is, only the Microsoft OS software) was properly licensed.

In theory, the target for this program was people who bought computers with OEM Microsoft software which, unbeknownst to them, was not appropriately licensed. In theory, people who downloaded or obtained software off the web kinda knew or suspected that their free copy of Windows XP Professional might not be legitimate.

The WGA program was not really a consumer protection program. It was actually designed to protect Microsoft itself from people obtaining unlicensed copies of its Windows (tm) operating system, and forcing them to obtain actual licensed copies of the OS.

If you were the victim of fraud, and had unknowingly obtained a copy of the OS without a license, Microsoft's software did not help you obtain redress against the seller of the computer or OS. It merely offered you a mechanism to repurchase the software, at full price, from Microsoft itself.

Presumably, the consumer who obtained a perfectly functional computer from an OEM manufacturer at a fair market price (well, lets assume a slight bargain) was now given the opportunity to give Microsoft more money to prevent piracy.

I must admit some aversion to the term "piracy" - as it evokes images of peg-legged men with parrots swinging from riggings of Galleons with knives between their teeth demanding ransom - not someone who has obtained software without adhering to the terms of the End User License Agreement.

Captain Jack Sparrow with a modem? Software "piracy" is at worst theft, and more generally a breach of contract - not an armed gunmen taking hostages off the Somali coast. Congress' authority to regulate software piracy rests in Article I Section 8 of the Constitution, which gives them the ability, "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries". This is not the portion two clauses down which gives them the ability "to define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations". Unless of course, you had a broadband connection on your Brigantine.

Indeed, those who were the "victims" of software piracy and who presumably wanted to "get legal" were the ones who purchased OEM products that were unlicensed - and they were the ones being forced by Microsoft to "walk the plank." Arrrrrrrrrrrrgh.

It's not like Microsoft was going after the OEM manufacturers and distributors of unlicensed product, obtaining monetary judgments and then giving that money to the purchasers of the products. No, the enforcement actions were aimed at obtaining license fees and civil and criminal sanctions for the company, all the while the company was claiming that the unwitting purchasers were the victims.

In fact, even if the Redmond giant successfully squeezed license fees or other sanctions from the OEM selling the unlicensed software, they still retained the right, through the WGA program, to go after the individual (and possibly unwitting) purchasers for the license fees again. Well, life 'aint fair. Deal with it.

The progression of security updates and unlicensed software

Now, make no mistake. The sale and transfer of unlicensed software presents serious economic costs to software manufacturers. The Business Software Alliance (PDF) estimated in its March 2006 report that for the previous year about 35 per cent of software on PCs was improperly licensed, and that worldwide the median piracy rate was about 64 per cent. In fact, the BSA estimated that, in 2005, for every $2 of software purchased legally, $1 was obtained illegally. This amounts to billions of dollars of losses - a sizeable portion of which must be for Microsoft itself. No wonder it instituted a program to protect itself. But did it go too far?

As originally instituted in April, 2004, the WGA program was a way for you to scan you own PC and determine whether your copy of the Windows OS was appropriately licensed. The software was listed as an "update" - and a high priority update at that, when you went to download and install security updates. So you would think that this was a high priority update to help you to secure your own computer. But no. What it was, in fact, was a program that you would install on your computer that would collect information for the benefit of Microsoft. Indeed, assuming that the pirated software was genuine pirated software (that is, not a Trojan horse program) then by installing the program you actually became less secure.

A few observations are in order. Out of the box, with no updates, service packs, or patches, the Microsoft OS of your choice is buggy and has obvious security vulnerabilities. Indeed, if you buy a new PC, fully licensed out of the box, once you connect to the internet, it can take as long as several hours for you to download and install all of the relevant patches, updates and drivers just to get the machine functional. And that doesn't include things like firewall settings, anti-viral and anti-spyware software, which you have to buy separately from Microsoft or other vendors.

The plain truth was that most casual users never did these downloads. As a result, most systems were woefully insecure. In an effort to "take the human out of the loop", Microsoft introduced an automatic update service. After agreeing to a general End User License Agreement, you would set your computer up in automatic mode, and it would download and install updates necessary to protect not only your computer but any computer to which your computer might connect.

You also had the option to have more control over the settings and just install the software, or you could simply manually update your system. But again, the more updated your system was, presumably the more secure. So automatic update was the way to go.

If you have automatic updates set up, you get the WGA installed automatically. According to the complaint, Microsoft's director of Genuine Windows, David Lazar described the WGA program stating:

"The system works by identifying unique characteristics of a system and implanting a software key that can be read by Microsoft when updates are requested. The only way to remove the key is to reformat the hard drive [...] The key won't be used to identify individual users, only individual systems [...] I would go back to our privacy policy which says we have no knowledge of the identity of the users, so a user shouldn't be concerned about the use of that key."

Um... not quite.

First of all, the software looks at a bunch of things in the hardware to develop a profile of the user - the MAC address, the serial number of the hard drive, its size, and so on. Thus, if you get a new hard drive or other hardware, the key won't match, and you could be flagged as a pirate for using your licensed software.

Second, the statement suggests that the only time you get electronically frisked is when you affirmatively request an update. Also not true. With automatic updates on (a setting suggested by Microsoft) you are frisked every time your computer updates - or every time Microsoft pushes an update to you. Indeed, you are frisked more often than that. Finally, and most disturbingly, is the allegation that the key won't be used to identify individual users. Oh really? Cross your heart and hope to die, pinky promise?

Broken promises?

In July 2005, Microsoft changed the WGA program, making users install an Active X control that also generated a software key, and again promised that Microsoft does not collect any information during this process] that can be used to identify you or contact you." Similar promises were contained in the FAQs and privacy policy of Microsoft.

In April 2006 the program was expanded once again - to Microsoft's advantage. Now, as you automatically updated the software using Windows Automatic Update, the WGA validation program was automatically added to your system. If the software thought your software wasn't valid, you got annoying pop-ups prompting you to get legal, allegations that you were breaking the law, and slower boot up times.

In addition, this high priority update was now being used to hold users hostage - no longer could they automatically get software necessary to make their buggy OS reasonably secure without agreeing to the electronic frisking. Without the possibility of pop ups and accusations, you could not get critical security updates.

In May 2006, the head of Microsoft's antipiracy program, Michala Alexander told CNet that: "... the WGA is a voluntary service. You can turn off the pop-ups, and people can opt out of it. They still get all the core downloads, but what they don't get is stuff such as Windows Defender. They still get all the security patches - we don't penalise customers for not joining."

Not quite. You couldn't get the stuff automatically. Thus, if you didn't install the WGA software, you were putting everyone else on the internet at risk. Fun stuff.

Once installed, the EULA says that "you will not be able to uninstall the software..." It describes the fact that the software will connect to Microsoft, that by using the now permanent software you consent to this, and that you will not be notified when the connection is made. The EULA notifies you that it uses internet protocols which sends to Microsoft computer information such as your XP product key, PC manufacturer, OS version, XP product ID, PC BIOS information, locale setting and language version of Windows XP.

It then explains that Microsoft does not use the information to identify or contact you. Yeah...right. Well, not today... maybe.

Windows Genuine Advantage versus spyware

So what does the WGA software do, exactly? It runs surreptitiously on your computer. It scans the software and hardware, and extracts information about it. If you DON'T run it, your computer becomes unsafe. If you do run it, you have the possibility of getting pop-ups and slowing down your system.

Indeed, Microsoft on July 2, 2006, promised that the unlicensed user experience would get even worse. This was with Microsoft's PR flack telling Computerworld that: "In Windows Vista, we are making it notably harder and less appealing to use counterfeit software, and we will work to make that a consistent experience with older versions of Windows as well." Sounds an awful lot like spyware to me.

Indeed, the EULA here is more onerous and less clear than that which the FTC found actionable for online spyware manufacturer Odysseus, who purported to allow people to download software to make Kazaa P2P software anonymous, but which actually collected personal information and sent adware to the users (PDF). In plain terms, spyware EULAs aren't enforceable, and the WGA license sure sounds like a spyware EULA.

In fact, the class action lawsuit against Microsoft, in addition to alleging violations of the Washington State and California deceptive and unfair trade practices statutes, alleges that the WGA software violates the Washington State anti-spyware law which makes it a crime to:

(1) Induce an owner or operator to install a computer software component onto the computer by intentionally misrepresenting the extent to which installing the software is necessary for security or privacy reasons or in order to open, view, or play a particular type of content; and

(2) Deceptively cause the execution on the computer of a computer software component with the intent of causing the owner or operator to use the component in a manner that violates any other provision of this section.

The lawsuit also alleges a violation of the California anti-spyware statute which also says that you cannot:

(1) Induce an authorised user to install a software component onto the computer by intentionally misrepresenting that installing software is necessary for security or privacy reasons or in order to open, view, or play a particular type of content.

(2) Deceptively causing the copying and execution on the computer of a computer software component with the intent of causing an authorized user to use the component in a way that violates any other provision of this section.

So what about the promise that the information cannot and will not be used to identify individual users? Not so fast. Let's see exactly what information Microsoft is having its OS call home with. Sure, it sends the key, and configuration information. But it sends it over the internet. This adds one more piece of information to the mix - the system's IP address. The government is increasingly demanding that ISPs, and now entities like Myspace.com, retain information for years about IP address holders specifically so that it (and private litigants) can use the IP information to determine the true identity of users.

Does Microsoft's promise that it does not collect information from which it can learn your identity mean that it doesn't collect the IP information for millions of computers that connect to its servers? I think not. Or that it doesn't retain (at least briefly) that information? Somehow I doubt it.

This problem is not unique to Microsoft. Many companies proudly exclaim on their websites that they "do not collect personal information" or that they only collect that information that people voluntarily provide. They also eschew any attempt to find out who you are - ever, for any reason, really and truly, we mean it.

What this really means is that, if a hacker or attacker were to attempt to access the system, or was truly able to break in, the company's privacy policy pretty much says we won't use the information on our system (your IP address, keystrokes, and so on) to try to identify you. I mean, isn't that what it means when you say you won't collect any information and won't attempt to use it?

In the case of Microsoft, is it really saying that, if the FBI came to them pursuant to a criminal investigation of software piracy, it would not and could not turn over the IP information to help the FBI determine the identity of those committing piracy? Does this mean that Microsoft has never collected it? That if it really wanted to, it could never find out who had unlicensed products? Somehow, I don't think so.

In fact, Microsoft's head is writing checks its body can't cash. On July 2, 2006, Microsoft's PR flack responded to rumours in the blogosphere that, in addition to annoying pop-up ads, Microsoft would soon deactivate any unlicensed copy of Windows. The Redmond giant quickly, but in my opinion unconvincingly, quashed these rumours.

According to a spokeswoman with Waggener Edstrom, from Microsoft's public relations firm: "Microsoft antipiracy technologies cannot and will not turn off your computer."

Hmmm... Microsoft cannot turn off your computer? Well, um... of course it can. When the software phones home to see if it is licensed and it receives a "no" signal, it could simply cease to operate. It is technologically feasible, isn't it? Perhaps she meant that the computer's power will still be on (it won't turn off your computer...), not that it will continue to function.

Moreover, as we have learned from past experience, the fact that Microsoft says now that software will behave in one way doesn't mean that this is the way it will behave in the future. Just download another EULA, or another update.

What all this means is that whenever you collect personal information - whether actively or passively - that could be used to identify people, you need to let them know in clear, unambiguous and easily accessible language. Don't worry, nobody is going to read it anyway. And in the case of Microsoft, does it have any meaningful choices? Sure...that little Antarctic bird...

This article originally appeared in Security Focus.

Copyright © 2006, SecurityFocus

SecurityFocus columnist Mark D Rasch, JD, is a former head of the Justice Department's computer crime unit, and now serves as senior vice president and chief security counsel at Solutionary Inc.