Microsoft on Friday called on companies that provide Internet advertising services to adopt a number of specific steps to ensure the protection of consumer privacy.
Microsoft said it submitted its proposals to the Federal Trade Commission in response to the agency's request for comments on Internet self-regulation guidelines it's mulling.
Microsoft said Internet advertisers should adopt a five-tiered system of standards to protect consumer privacy across commonly used online ad scenarios.
Organizations that keep records of consumers' page views in order to serve up targeted ads on their own sites should inform visitors about the practice "and retain data only as long as necessary to fulfill a legitimate business need," Microsoft said.
Entities that collect personal information to deliver ads across unrelated, third-party sites should allow consumers to opt out of the practice, Microsoft said.
Companies that build behavioral profiles of consumers based on their Web surfing habits in order to serve up ads to third parties should also give individuals the ability to opt out, said Microsoft.
In addition, the company said, Internet advertisers should let consumers opt out of programs that use personally identifiable information and should obtain express consent before using information that could reveal sensitive personal information such as medical conditions, religious beliefs, or sexual orientation.
"Online advertising should put consumers in the driver's seat, not only with the information they want to see, but also with the tools to protect their privacy," said Microsoft general counsel Brad Smith, in a statement.
Microsoft has used acquisitions and partnerships to become one of the Internet's biggest digital advertising services companies.
Last month, the software maker bought out Rapt, a San Francisco-based developer of yield management software and services for Web publishers. Rapt's customers include Dow Jones, The Weather Channel, and NBC Universal.
Last year, Microsoft acquired digital advertising agency aQuantive for $6 billion.
Microsoft is also looking to buy Yahoo, the Internet's largest provider of online display advertising, for $31 per share.
Microsoft in 2002 settled FTC charges that it failed to protect the privacy of users of its Passport online identity service.