Microsoft's problems with Brussels have been compounded by news that the European Commission is investigating whether Passport is compatible with European data protection law. European law is substantially tougher than the US equivalent in this area, and Microsoft's record on database control is somewhat patchy, so it wouldn't be a big surprise if the Commission decided there was a problem here.
The news of the investigation came in a letter to Netherlands European Parliament member Erik Meijer, who had raised numerous objections to Passport, and accused Microsoft of "surreptitiously" passing on registration information to "unknown parties." His view that Hotmail addresses are a particular example of this may have some resonance with spam-plagued Hotmail users.
Some of Meijer's questions, which you can find here, are frankly a little weird. But "Is .NET Passport registered with national agencies supervising the application of privacy legislation?" seems to us a fair, reasonable and possibly tricky one. We'd guess the answer is not exactly, but we're prepared to be surprised.
The Commission's response is that it is looking into it "as a matter of priority, in concert with national data protection authorities" (our emphasis), so clearly it finds this question interesting too.
The central difficulty here however is not that Microsoft specifically is a great privacy invader, but that there is a chasm between the EU policy on privacy and the US one. The EU polices privacy via legislation, whereas the US goes for a more laissez faire self-regulation approach (we do not at this juncture propose to make any observations about henhouses and foxes). This threatened a trade war a few years back, but it was averted by a fudge, the "Safe Harbour/Harbor" arrangement.
This essentially boils down companies being certified as good and proper custodians of data on EU citizens, and Microsoft signed up for it last year. Not of course that they are, necessarily, really. Have they been independently audited? Or have they just promised to be good? If it transpires that Microsoft Passport isn't compatible with EU law, then Mr Meijer might do well to ask questions about how come this could possibly apply to a company that had successfully signed up to Safe Harbour.
He's quite good at questions. You can find some of his previous hits here, and here. And you can find some information on the career of the other, unrelated, Erik Meijer and his not entirely successful career as a striker for Liverpool here.