Microsoft recently updated the terms for its Windows Live online services, and some of those changes have raised red flags regarding privacy. The new terms of service include a clause that allow sharing of user data across desktop and cloud services.

The new Windows Live terms are similar to the changes Google made in March, which did not sit well with EU regulators. The Microsoft terms are scheduled to come into effect on October 19, 2012 and will give Microsoft the right to make use of user content to “provide, protect and improve Microsoft products and services.” Essentially, any content you upload and store on Microsoft’s servers may be “modified, adapted, saved, reproduced, distributed, and displayed” whenever Microsoft decides that doing so will “provide, protect, or improve” its own services.

The terms seem to be intentionally vague, and while regulators in the U.S. may be inclined to allow them, European authorities are considerably more concerned about user privacy. EU regulators asked Google to postpone the changes until they could evaluate them, and it is conceivable that they may ask Microsoft to do the same.

Microsoft has attempted to highlight examples of how it might need and benefit from user data. In one example, it stated that the company might use an automated system to extract information from email, photos, or chat conversations to help it fight spam and malware. It might also use that information to make services “easier to use.” Again, all of it is very vague and certainly does not restrict Microsoft to only those examples.

Cloud privacy and security is becoming an oft-revisited topic in the IT world, with more security horror stories and privacy guffaws surfacing each month. Some might argue that these are just the inevitable growing pains of a new type of service that is developing extremely rapidly. Others, however, may elect to not trust leaving their data in the cloud at all.