A suggestion by Microsoft that search engines in Europe should keep customer data for just six months before converting it to an anonymous format has caused consternation among other technology companies who claim this could prevent innovation and even threaten network security.
Microsoft, which represents 2 per cent of the European search engine market, keeps customer information for 18 months, while Google retains data for nine months and Yahoo for 13 months.
Microsoft moved to change its position - on the condition other search engines did the same - following European Union proposals this year that six months was a more reasonable period.
The data protection working group is concerned search engines which keep information on searches could breach user privacy.
John Vassallo, Microsoft's vice-president for European Affairs, told the Financial Times: "It is definitely feasible to manage the business optimally on a six-month data basis. We want user trust and confidence to grow."
Microsoft has also pledged to make search data completely anonymous after the six-month period by removing the entire IP address - a computer's unique identifier on the internet - and all cookies, which are used to track search sessions.
But Peter Fleischer, Google's global privacy counsel, who has just been appointed as an independent expert to advise the EU working group, emphasised that analysing data over a longer time period and keeping some parts of the IP address helped the company to improve search functions.
"We have tried to strike a balance between privacy on one hand and system development on the other," he said.
Mr Fleischer also indicated decreasing the retention limit from nine months to six would lead to security concerns. "Nine months is the time the engineers thought they needed to protect the system from fraud and hackers," he said.
Yahoo said it was not going to be influenced by competitors: "We are making our global policy decisions based on what we believe best serves our users, not what our competitors are or are not doing."
Ian Brown, privacy expert at the Oxford Internet Institute described Microsoft's pledge as a "positive step forward". "It's a real pity organisations such as Google have resisted reducing their retention rates further."
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