Microsoft account allows users to sign in to websites that support this service using a single set of credentials.
The privacy terms were quickly updated by Microsoft to allay customers' fears.
In July and August 2001, the Electronic Privacy Information Center and a coalition of fourteen leading consumer groups filed complaints with the Federal Trade Commission (FTC) alleging that the Microsoft Passport system violated Section 5 of the Federal Trade Commission Act (FTCA), which prohibits unfair or deceptive practices in trade.
As a consequence, Windows Live ID is not positioned as the single sign-on service for all web commerce, but as one choice of many among identity systems.
In December 1999, Microsoft neglected to pay their annual "passport.com" domain registration fee to Network Solutions.
a British Indian IT Risk and Security executive, revealed a serious flaw in Microsoft Passport, through which any account linked to Microsoft Passport or Hotmail could easily be cracked by using any common browser.
Microsoft Passport, the predecessor to Windows Live ID, was originally positioned as a single sign-on service for all web commerce. A prominent critic was Kim Cameron, the author of the Laws of Identity, who questioned Microsoft Passport in its violations of those laws.He has since become Microsoft's Chief Identity Architect and helped address those violations in the design of the Windows Live ID identity meta-system.The payment resulted in the site being available the next morning.In 2001, the Electronic Frontier Foundation's staff attorney Deborah Pierce criticized Microsoft Passport as a potential threat to privacy after it was revealed that Microsoft would have full access to and usage of customer information.
The oversight made Hotmail, which used the site for authentication, unavailable on December 24.A Linux consultant, Michael Chaney, paid it the next day (Christmas), hoping it would solve this issue with the downed site.