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Windows Activation Technologies: an unauthorized inside look

By | March 4, 2010, 4:00am PST

Summary: Last month, Microsoft rolled out a controversial anti-piracy update for Windows 7. Everything you’ve read about KB971033 so far, including my report last week, has been based on what Microsoft said it was going to do. But what does this update really do? I took a close look using my best CSI toolkit. Here are the details Microsoft doesn’t tell you about.

Trust, but verify. That was good advice for dealing with the Soviet Union in its heyday, and it’s equally sound policy today when dealing with that other Evil Empire. You know, the one in Redmond?

Last month, Microsoft rolled out an update to its Windows Activation Technologies (WAT) platform in Windows 7. Everything you’ve read about KB971033 so far, including my report last week, has been based on what Microsoft said it was going to do; in my earlier coverage, I gathered information from blog posts, published privacy policies, a Knowledge Base article, and some one-on-one interviews. But can you really believe everything Microsoft tells you about its new Windows Activation Technologies update?

Now that the update has been publicly available for a few weeks, I’ve been able to dig into it and determine exactly what it does. You don’t have to take my word for it, either. You can download the same tools I used and check for yourself. (And don’t miss my post from yesterday, Confessions of a Windows 7 pirate, which takes a similarly detailed look at the pirates’ toolkit for cracking Windows activation.)

I tested on multiple PCs, running both x86 and x64 editions of Windows 7. To observe its activity, I collected traces using two tools:

  • Process Monitor is the flagship utility from Sysinternals.com, originally developed by Mark Russinovich and Bryce Cogswell. (The company was purchased in 2006 by Microsoft. The Sysinternals utilities are currently hosted on Microsoft-run servers but are still maintained and regularly updated by Russinovich and Cogswell, both of whom are now Microsoft employees. )  I used the most recent release of Process Monitor, v2.8, to save a trace of all file, registry, and process activity associated with the installation and operation of the WAT Update.
  • Wireshark is a free, open-source network protocol analyzer. I used version 1.2.6 with WinPcap version 4.1.1 to capture all network traffic while the WAT Update was running.

I installed the KB971033 update on multiple systems using both the downloaded version and the one delivered through Windows Update. I also uninstalled the update and observed what happened.

From a technical standpoint, I was able to confirm that the WAT update does what Microsoft says it does. I was not able to read the contents of the signed, encrypted packets going across the wire, but I did locate the stored information in the registry and compared it to Microsoft’s published privacy policy.

You can see the full results of my tests on the next three pages. As I said, you don’t have to take my word for it. I encourage you to do this for yourself so you can make your own decision based on your own evidence. If you see something different, let me know in the Talkbacks.

Page 2: What files does it install? What else does it do to your system? I was able to observe exactly which files it installed, and I also recorded changes it made to the registry and in Task Scheduler.

Page 3: What does the Windows Activation tool do when it runs? How does it communicate with Microsoft? I used details from the Process Monitor trace to identify which system licensing files are being checked, and I also confirmed that all communications with Microsoft servers were over secure connections.

Page 4: What information does it exchange? What happens when you uninstall it? I examined the privacy policy for the information exchange (and also verified a crucial certification for it). I also confirmed Microsoft’s claim that the update can be uninstalled.

For details about what the installer does to your system, see the next page.

Page 2: What ’s changed on your system? –>

More from “The Ed Bott Report”

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Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications.

Disclosure

Ed Bott

Ed Bott is a freelance technical journalist and book author. All work that Ed does is on a contractual basis.

Since 1994, Ed has written more than 25 books about Microsoft Windows and Office. Along with various co-authors, Ed is completely responsible for the content of the books he writes. As a key part of his contractual relationship with publishers, he gives them permission to print and distribute the content he writes and to pay him a royalty based on the actual sales of those books. Ed's books written prior to fall 2011 have been distributed by Que Publishing (a division of Pearson Education) and by Microsoft Press. As of November 2011, Ed is a partner in the independent publishing company Fair Trade Digital Exchange, which exclusively publishes his books.

On occasion, Ed accepts consulting assignments. In recent years, he has worked as an expert witness in cases where his experience and knowledge of Microsoft and Microsoft Windows have been useful. In each such case, his compensation is on an hourly basis, and he is hired as a witness, not an advocate.

Ed does not own stock or have any other financial interest in Microsoft or any other software company. He owns 500 shares of stock in EMC Corporation, which was purchased before the company's acquisition of VMware. In addition, he owns 350 shares of stock in Intel Corporation, purchased more than two years ago. All stocks are held in retirement accounts for long-term growth.

Ed does not accept gifts from companies he covers. All hardware products he writes about are purchased with his own funds or are review units covered under formal loan agreements and are returned after the review is complete.

Biography

Ed Bott

Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications. He's served as editor of the U.S. edition of PC Computing and managing editor of PC World; both publications had monthly paid circulation in excess of 1 million during his tenure. He is the author of more than 25 books on Microsoft Windows and Office, including the recently released Windows 7 Inside Out.

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RE: Windows Activation Technologies: an unauthorized inside look
Clairvaux 6th Jan
"Let me turn around what you said: once my pirated software has been installed, if Microsoft doesn't detect it, that's their tough luck. They need to go away. If my pirated copy can pass detection once, I get a free pass forever." (Ed Bott)

Exactly. That's how it should be. In the political realm, it's the difference between a free country and a police state.

If you come back from a foreign trip, bring back some cigars above the limit, and the customs fail to find them at the border and tax you accordingly, that's the government's tough luck.

Would you say that the customs should be entitled to barge into every home in the country every day and night, just to check that someone has not evaded the controls at the border after their holidays ? (Obviously I'm not talking about organized smuggling on a large scale here.)

I don't think you would. I think you would find this abusive and gross and bordering on the totalitarian.

Why should it be different for Microsoft ? Just because, technically, they can do it ?

There has to be a balance between fighting organized piracy, trust between customer and provider, and plain old privacy and personal freedom.

I've personnaly paid full price for some Windows licences I'll never use, for various reasons. I'm offended that Microsoft think they have the right to snoop on me and hijack my hardware and bandwidth for the one licence that I both paid for and am using legitimately.
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Contributr
What's your experience?
Ed Bott Updated - 4th Mar 2010
As I said in this post, all of the results I collected here were done independently, using tools you can download.

If you have performed similar tests, or if you have other experiences to report involving the latest activation technologies from Microsoft, please share them here.
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RE OEM SLIC activation
5ft24 4th Mar 2010
Ed,
Did you test it against the BIOS SLIC mods that are out there to see if it detects those?
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Contributr
(nt)
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Screenshot...
robert@... Updated - 4th Mar 2010
I tried around October 2009 to run the same tests with similar results with the exception of an old Dell that did not have SLIC2 and (at the time) no bios emulator was working. I have not tested this again.

Just a small note off subject... Ed, the screenshot on page 2 of this article has a ragged torn-paper appearance. What application did you use to make it?
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Contributr
SnagIt, from TechSmith
Ed Bott 4th Mar 2010
It's one of many effects they offer, really great program.

http://snagit.com
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Now with a beta for Mac
Chiatzu 5th Mar 2010
I've used SnagIt on Windows and it is excellent. I see they now have a
SnagIt beta for Mac. Sweet. I think I'll give it a test run because I'd love
this app on the Mac.

You've written another well researched and detailed article, Ed. Good
work.
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Mystery keys what's up?
davisthediver@... 4th Mar 2010
I run Validation checks on the"cheap" keys and the product ID keeps changing.. whats with that?
One of the values looks suspicious just like a computers address.
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Well, I don't see the point
LegendsOfBatman 8th Mar 2010
First, hackers and pirates and such can work around anything MS does. But, in the realm of fairness, I can sympathize with a company wanting to protect their investment. However, I believe all this WGA stuff is crap.

Ok, fine, activate windows, determine if it's legit. But, why does it need to continue checking? And, why should ANYTHING but "pass" or "fail" be sent back?

I think it's a bunch of hogwash to say nothing personally identifiable is being sent. They know the exact configuration of my system. If that is not a fingerprint, what the hell is? Sure, it may take detective work, but, seriously. How hard can that be? But, my main concern is more over the stupidity of repeated verifications. Does my legit version suddenly become illegitimate after 90 days? Can it somehow magically become a pirated version? This all reminds me of when Gore tried desperately to make every vote go his way. There were people using magnifying glasses to try to see the slightest dimple to call it a vote for Gore. They recounted and recounted to alter the vote count. Gimme a break. Its the same thing here. And it's wrong, and should be not allowed. Once it's verified as legal, Microsoft should go hide in their closet and leave us alone. And, if something did get by, imo, that's just too bad.

And that's why I will most likely go Mac next time. (Not that they don't or wont do something similar, so keep it quiet fanboys. This isn't a flame war message. It's an aggrevated with the whole WGA message).
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Contributr
Did you even read this post?
Ed Bott 8th Mar 2010
If you had, you would see the answers to your questions.

Why continue checking? Because hackers are continually creating new ways to bypass the legitimate activation systems. They did that with the RemoveWAT tool immediately after this update came out. Presumably the "fixed" hack will be detected in 90 days.

Why collect other information? So that the activation proecss can be improved and made more accurate. Without collecting that information, the only way Microsoft knows there's a problem is when their support lines start to get overloaded with angry customers.
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My biggest gripe is MS did the WGA thing on a continual basis; updating the software every month or so. It was not accurate, and it was a PITA.

This "New and improved" version may or may not be better. Again, I get that MS wants to protect it's investment. But, once my software has been installed, and verified, that is it. They need to go away. My version does not suddenly become a pirated copy. So, they need to just go away.

I also get it that some people are great pirates. That's not my problem. It seems to me, MS wants to find every way possible to make my copy illegitimate. If I buy a pair of jeans, does that company get to install chips to make sure it's still legit? Then neither should MS. (Ok, it is different scenario, but, the point is, other industries get faked and stolen too; but, they don't get to keep asking for receipts and proof of purchase. And, that's my point.)

I'm cool with them verifying upon install, and every install. But, they need to leave me alone after that. That's all I'm saying.

And as far as privacy goes; yeah, I'm a privacy advocate; somewhat paranoid, but, I'm not worried "Ohh, someone at MS is watching everything I do". I'd hope they have better things to do than watch what I'm doing. But, nevertheless, people do banking and other things, some not so innocent, and well, with them being able to identify everything, perhaps not so personally identifiable on the spot, with some detective work, yeah, things can be pieced together, if someone wanted to.

But, hey, I love your articles, btw
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They should check on every install...
Sal McCarty 10th Mar 2010
Which would mean every time MS comes out with a software update that an end-user installs, then MS would be justified in checking to see if the system was authorized to be updated.
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Contributr
Here's what you're missing
Ed Bott 14th Mar 2010
And it's not just a semantic issue. Let me turn around what you said:

Once my pirated software has been installed, if Microsoft doesn't detect it, that's their tough luck. They need to go away. If my pirated copy can pass detection once, I get a free pass forever.

That's the flip side of your argument. Where we agree is that their detection has to be as close to 100% accurate as is humanly possible, conflicts have to be resolved in the favor of the customer, and support has to be readily accessible.
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Exactly backwards!
Ole Man 15th Mar 2010
This is how it SHOULD go.

If Microsoft can't verify a system the first time, they shouldn't even be trying. Let alone making repeated attempts. Their customer's hardware does not belong to Microsoft, even if their software does.

Hasten the day that SOME entity of substance challenge their EULAs in court. A court that doesn't belong to Microsoft.
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Is the annual/monthly validation checks for authenticity when the OS licensing model moves onto the same licensing format that the AV/Security Suites are on. M$ is ramping up and working bugs out for the future.
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Yeah, but as I recall
LegendsOfBatman 9th Mar 2010
MS' activation process led to the AV software vendors doing this. Prior to, they did not. Which was bad for them.

I do understand why an AV vendor would have subscription based services, however. MS, not at all. And then, there is a company, IOLO, I think, that does Drive Scrubber; it is an annual subscription? WHY? Who needs to scrub a drive annually (Well, besides me, lol)?

As far as Windows goes, I just don't see the point to continual verification. They get away with it, because we accept it.
once a month or twice a month. You have 10,000 programs on your computer. When are you supposed to get any work done between the validations? At the current rate that answer would be never your computer is a worthless hunk of metal at that point.
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Re: Did you even read this post?
Cardhu 9th Sep 2010
Re: "Why continue checking? Because hackers are continually creating new ways to bypass the legitimate activation systems."

Therein lies the fly in the ointment. The thieves always have the initiative. Microsoft's strategy is reacting to what the thieves do.

To the thieves, Microsoft's efforts are an entertaining diversion. The people most inconvenienced are honest users caught in Microsoft's crossfire when Microsoft gets it wrong - which Microsoft has a very good history of doing.
Activating a license and monitoring compliance are legitimate business requirements (in the trust but verify theme).

The technical problem is with mass deployments (ie enterprise site licenses), recovery (ie motherboard just died), and virtualization (a whole new twist). In each of these scenarios, as a legitimate - paid in full - licensee, I have a need and a right to move os images/licenses from one computer to another.

The problem is, legitimately copying an os image is indistinguishable from pirating an os image. With WAT/WGA Microsoft is taking the soft approach... Apple in contrast has taken the hardball approach (ie you may only run Apple OS on Apple hardware or else we sue you into oblivion).

There are other license authorization and verification methods which are more cumbersome to use, but eliminate the entire problem of tracking bits & bytes.
@LegendsOfBatman My first thoughts here is that you have something to hide? Even without this verification tool, windows still sends data to microsoft whenever it validates for a legit only windows software installation, when data is sent, it is very specific about Windows itself, not about the user!

If you are worried about being identified in this way, then I suggest you stop using the internet, as your computer leaves a trail of bread crumbs that leads straight to you!
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Contributr
Great work Ed!
Adrian Kingsley-Hughes 4th Mar 2010
Good work there Ed.

I've independently verified a few of the claims that MS made and came to exactly the same conclusion that you do.

This tool is going to give MS a lot of info on activation exploits out there, and the real-time telemetry could be used to render exploits dead in the water quickly ... pirating Windows is going to get harder.
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I agree
RickyF 4th Mar 2010
i echo Adrian's praise.
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Maybe so, but
Cylon Centurion 4th Mar 2010
There will be those who still try, despite how hard it may be.



Great article Ed!
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I agree - great work, and a lot of it...nt
ItsTheBottomLine 4th Mar 2010
nt
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Bravo!
djchandler 4th Mar 2010
Combined with yesterday's post, this is priceless
information.

Keep up the great work. I've been following your
blog for a couple of years--now I'm a fan. You,
Adrian and Jason P. keep me coming back to ZDNet
for interesting and thought provoking articles.
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I Agree and maybe...
windozefreak 4th Mar 2010
This will be the starting point to stopping all exploits.
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pie in the sky
Wintel_BSOD 4th Mar 2010
If Windoze really wants to make a dent in piracy, then lower your prices.

But we know that won't happen. Greed rules the day.
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Agreed: excellent work
bblackmoor@... 8th Mar 2010
Agreed: excellent work
Great article again! I can see the comments
now. What's interesting to me is it highlights
something that the conspiracy theorists don't
seem to get...Microsoft have billions of
customers, 90m already running Windows 7; if
you have that much information you just
couldn't mine it - let alone store it! It
would be costly and superfluous to business
needs.

Activation is an automatic way to ensure you
have a genuine copy - it ensures 80% are legit
and, ok 20% might not be but chasing them down
would cost you the income from the 80%.
Economics. (might be something to be said for
getting 20% of the 20% though).
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Activation annoyances and bugs
gingoro 4th Mar 2010
Since I run totally legal systems I don't much care about what activation does so long as it does not take up too much resource and works all the time. Working all the time is not guaranteed! Usually my systems run on a DSL connected net however at the cottage last summer my primary boot partition failed for some reason and I was unable to get the backup partition to boot because of activation issues. I'm not exactly sure why but the alternate boot would not let me do anything without activating and by anything I mean even trying to set up dial in access. The only way to activate was to call the Redmondians probably in India somewhere. Given that I have a speech impediment calling them was not an option so I had no system till I drove back to the city (165 miles each way) and activated winders again on the backup partition and got things fixed up. To say the least I was unhappy. This year I expect to have Ubuntu on my back up partition even though I loose my email client (postbox) and my PIM (infoselect) although I am working on getting them to run using a virtual machine booting either Win2K or Win98. It is not clear if my laptop has enough power to make running a virtual system realistically, I tried a netbook and failed as it did not have the cpu cycles or memory.

Thanks for checking upon that the Redmondian's appear to be following their own guidelines.

Dave W
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Contributr
Which Windows version?
Ed Bott 4th Mar 2010
The phenomenon you describe shouldn't happen with the latest releases of Windows XP (SP3 or later), Vista (SP1 or later), or Windows 7.
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Which Windows version?
gingoro 4th Mar 2010
I was on Windows XP as I could not stomach Vista but now I am on Windows 7 at least on some of my systems including my laptop that I port back and forth. In the fall all my systems will be Win 7 dual boot at least. Migration needs a clean install and a lot of work reinstalling all the apps on my development machine. I agree that what I experienced should not happen as I had validated my backup boot partition but had not actually booted it for months.
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Contributr
That was default behavior with XP
Ed Bott Updated - 4th Mar 2010
An unactivated system would not run at all. That's been fixed with SP3 so you simply get warnings.
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xp default behaviour
gingoro 4th Mar 2010
I had activated the install on the backup partition and actually booted it connected to my DSL connection and all was well. Actually I expect that the boot partition was made using Partion Magic to duplicate the main boot partition and do its fixups, or I restored a ghost of the main partition. I have thought about the date and think it was not summer or 09 but summer of 08 so I probably was not at SP3 level. In any case the partition had not been run for 5 to 12 months.

I used to haul a compact cube system back and forth, now I take my laptop and my netbook as backup. Not getting decent weather forecasts when contractors are scheduled for outside work gets very difficult, also some family count on reaching us by email.
Thanks
Dave W
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And it's still default with SP3
reziol 4th Mar 2010
I put in a new, and bigger, hard-drive into an old lap-top, and since I didn't have the restore disks, I used a new XP SP3 disk. Once it went past the activation time before I got it fully up and running (including the networking settings), I could not use the automatic activation and HAD to do it by phone. It would not let me in to adjust the networking settings to be able to activate online.

Now, was this because it's XP Home Edition with Service Pack 3; or does it do it because it's any version of XP?
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Contributr
You had 3 days to reactivate
Ed Bott Updated - 4th Mar 2010
You get 30 days on an initial install, 3 days on a hardware change that forces reactivation. You didn't set up networking during that time?
I myself have started something only to wind up unexpectedly istracted by a 3-day hospital admission.

Stuff happens. Often such stuff does not fit within arbitrary but hard deadlines.

It doesn't matter why the original poster wound up in the situation he did. He just did. No recrimination necessary.
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Contributr
It was a question
Ed Bott 4th Mar 2010
Not "recrimination."

The process of setting up Windows XP takes an hour or two. Network setup is part of that. I wonder why someone would not do that. So I asked a question.

Anyway, you can sort it all out in a single phone call of 10 minutes or less, so I'm wondering what the big deal is.
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without being able to hear voice tone or see body posture and facial expression.

In technical discussion, "couldn't you set up networking ..." would be a question.

"You didn't set up networking ...?" expresses incredulity. That does not come across as "just a question."
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Contributr
You assume
Ed Bott 5th Mar 2010
If you can't read nonverbals, then you assume. In this case, incorrectly.
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Not Assume. Perceive.
Cardhu 5th Mar 2010
What kind of person is indifferent to public perception?
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Contributr
You assume..
Ed Bott 5th Mar 2010
...that your perception is universal. I disagree.

One thing I learned long ago as a writer is that no matter how much I try, some significant portion of my readership will misperceive what I write. That's not unique to me; it's true for any writer.

That realization is liberating, because I no longer feel the need to try to deal with every possible perception or misperception someone can come up with. Instead, I strive to communicate clearly and accurately.
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By Now You Should Know Me A Lot Better Than That
Cardhu Updated - 8th Mar 2010
Especially after the times I have written in your defense.

I do owe you an apology. Posting my comments in public was inappropriate.
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Contributr
No apology necessary
Ed Bott 5th Mar 2010
I appreciate your direct style.
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And I Yours.
Cardhu 8th Mar 2010
nt
@gingoro The hackers know how to bypass protection the cretin MS programmers wrote in about 5 minutes after it's released, so the only people completely screwed by MS's stupid activation crap is the legit user.
It is not clear how to RSS subscribe to just comments just on this topic.
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Contributr
Should be fixed now
Ed Bott 4th Mar 2010
Give it another try. Open any single Takback comment and use the RSS button at the bottom.
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And there is the big question???
No_Ax_to_Grind 4th Mar 2010
You stated: "I was not able to read the contents of the signed, encrypted packets going across the wire."

So no matter what else yoiu may have done, you (we) have no idea what is being sent.
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Contributr
Yes, we have an idea
Ed Bott 4th Mar 2010
I was able to see the information that was collected and stored in the registry and was accessed during the transmission. You can see it for yourself. It is a set of result codes and hashes.

Also, EuroPriSe is validating the exchange of information as well to verify that it meets Germanys very strict privacy laws. That independent certification is meaningful.
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Ed, you take a lot on "good faith"
No_Ax_to_Grind 4th Mar 2010
Hash codes? They could contain just about anything. The truth of the matter her is that it is all but impossible to really know what is being sent but, the bigger problem is that we are talking about Microsoft.

For better or worse, Microsoft has proven far too many times over the last 30 years that they can not be trusted, sorry but that is how they are percieved by far too many people.
"Let me turn around what you said: once my pirated software has been installed, if Microsoft doesn't detect it, that's their tough luck. They need to go away. If my pirated copy can pass detection once, I get a free pass forever." (Ed Bott)

Exactly. That's how it should be. In the political realm, it's the difference between a free country and a police state.

If you come back from a foreign trip, bring back some cigars above the limit, and the customs fail to find them at the border and tax you accordingly, that's the government's tough luck.

Would you say that the customs should be entitled to barge into every home in the country every day and night, just to check that someone has not evaded the controls at the border after their holidays ? (Obviously I'm not talking about organized smuggling on a large scale here.)

I don't think you would. I think you would find this abusive and gross and bordering on the totalitarian.

Why should it be different for Microsoft ? Just because, technically, they can do it ?

There has to be a balance between fighting organized piracy, trust between customer and provider, and plain old privacy and personal freedom.

I've personnaly paid full price for some Windows licences I'll never use, for various reasons. I'm offended that Microsoft think they have the right to snoop on me and hijack my hardware and bandwidth for the one licence that I both paid for and am using legitimately.

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