Microsoft says it's legal for the company to search customers' Hotmail correspondence without a court order, after it admitted rifling through the account of a blogger accused of receiving Microsoft trade secrets.
Former Microsoft employee Alex Kibkalo is currently facing criminal charges after he was accused of leaking details of Windows 8 to a blogger in France.
Court documents revealed that Microsoft found an email from Kibkalo in the blogger's Hotmail account, raising questions over the legality of such a move.
Microsoft vice president and general counsel, Frank Shaw, defended the search, claiming it was perfectly legal for the company to search its own servers.
"Courts do not issue orders authorising someone to search themselves, since obviously no such order is needed," Shaw said in a statement. "So even when we believe we have probable cause, it's not feasible to ask a court to order us to search ourselves."
Nevertheless, Shaw claims Microsoft will tighten up its internal procedures to ensure that customers' Hotmail (now renamed Outlook.com) isn't searched without due cause.
"Even we should not conduct a search of our own email and other customer services unless the circumstances would justify a court order, if one were available," said Shaw.
"To ensure we comply with the standards applicable to obtaining a court order, we will rely in the first instance on a legal team separate from the internal investigating team to assess the evidence.
"We will move forward only if that team concludes there is evidence of a crime that would be sufficient to justify a court order, if one were applicable.
"As an additional step, as we go forward, we will then submit this evidence to an outside attorney who is a former federal judge. We will conduct such a search only if this former judge similarly concludes that there is evidence sufficient for a court order."
Microsoft claims that in the interests of transparency, it will reveal how many customer accounts have been searched in its bi-annual transparency report. However, it won't include searches of Microsoft's own employees' accounts in the report.
"The privacy of our customers is incredibly important to us, and while we believe our actions in this particular case were appropriate given the specific circumstances, we want to be clear about how we will handle similar situations going forward," Shaw added. "That is why we are building on our current practices and adding to them to further strengthen our processes and increase transparency."
The revelations are made even more embarrassing for Microsoft, given that its Scroogled campaign attacks Gmail for invading users' privacy by scanning inboxes for advertising purposes.