Microsoft was asked by European Union data-protection regulators to tweak policies for its Internet products including Hotmail and Bing search engine as part of a formal probe into possible privacy issues.

Data regulators "identified a number of areas where improvements are required," the EU group said in a statement. "Microsoft was asked to send its response very shortly, explaining how and when it would implement" the recommendations.

Updates to Microsoft's services agreement, which took effect last year on Oct. 19 have been formally reviewed by EU regulators, with the data-protection commissions for Luxembourg and France leading the investigation. Google Inc. (GOOG) has also come under fire by the 28 EU data-protection regulators, who work together in the so-called Article 29 Data Protection Working Party.

The authorities "are confident that an agreement will soon be found," Gerard Lommel, head of the Luxembourg regulator, said in an interview today. The Luxembourg and French "have appreciated the transparent cooperation of Microsoft," he said.

Data protection is currently policed by separate regulators across the EU. As part of an overhaul of the union's 18-year-old rules on the issue, its executive body wants to simplify the system so companies deal with only one regulator in the region.

"Strong commitment to privacy is a key differentiator for Microsoft so we'll always carefully review any feedback we receive," Robin Koch, a spokesman for Microsoft, said in an e- mail.


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The group of EU data watchdogs wrote to Google Chief Executive Officer Larry Page a year ago, saying the company "empowers itself to collect vast amounts of personal data about Internet users" without demonstrating that this "collection was proportionate," and asking the company to bring its policy in line with EU rules.