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As a result of the searches, former Microsoft employee Alex Kibkalo was arrested in Seattle for leaking code of the not-yet-released Windows 8 code and the kit required to activate the software.
Although the unnamed blogger posted only screenshots of Windows 8, Kibkalo has been charged with encouraging the blogger to post the activation kit, a key part of Microsoft’s anti-piracy system.
Microsoft kicked off its investigation when the blogger contacted the company to confirm the authenticity of the leaked Windows 8 code, reports the Guardian.
A search of the blogger’s Hotmail account turned up an email from Kibkalo. But that has raised concerns about the privacy of the Microsoft-owned Hotmail free e-mail service recently rebranded Outlook.com.
Microsoft issued a statement saying that it terms of service provide clear permission for this type of review, which happens “only in the most exceptional circumstances”.
John Frank, deputy general counsel for Microsoft, said it took "extraordinary actions in this case" and while the search was technically legal he said Microsoft would consult outside counsel in the future.
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The search was legal because Microsoft's terms of service state that the company can access information in accounts that are stored on its "Communication Services", which includes email, according to the BBC.
The terms of service add: "Microsoft reserves the right to review materials posted to the Communication Services and to remove any materials in its sole discretion."
However, the revelation of Microsoft’s email search has put the company in an awkward position because of its past criticism of Google for scanning email accounts for targeted advertising purposes.
As a result, Microsoft has announced changes in its internal policy on handling such type of cases in the future, reports Microsoft News.
The company said in future it will act only if a legal team separate from the internal investigating team concludes there is evidence of a crime that would be sufficient to justify a court order, if one were applicable.
As an additional step, Microsoft will submit this evidence to a former federal judge, and will conduct such a search only if this former judge concludes that there is evidence sufficient for a court order.
Microsoft said if such a search takes place, it will ensure the search is confined to the matter under investigation and it will ensure transparency by publishing data on such searches as part of the company’s bi-annual transparency report.
Earlier this week, it emerged that Google is facing a lawsuit in California over whether bulk scanning of emails to deliver advertisements breaches state and federal wiretap laws.
The nine plaintiffs accuse Google of breaching wiretap laws, and hope to start a collective “class action” suit to gain financial compensation for Gmail users, reports the Guardian.
The group also hopes to force Google to be more open about its policies.