Microsoft is demanding that organisers of a mock awards ceremony withdraw their nomination of the company for practices deemed a threat to personal privacy.

Microsoft is at the top of a list of companies, politicians and institutions being considered for the Austrian 'Big Brother Awards', a tongue-in-cheek ceremony intended to raise awareness of the issue of personal privacy in the Information Age.

The award sponsors nominated the software giant "for an attempt, such as has never been seen before in such dimensions, to obtain complete control over its customers", citing the "mandatory registration" for the new Windows XP operating system, and the Passport online identification system, which "gives an almost unlimited potential for surveillance".

Microsoft vehemently rejects the allegations, said Thomas Lutz, a spokesman for Microsoft Austria, in a telephone interview, adding that he had responded to the group's claims in an email message.

"The product activation of Windows XP can in no way be called a 'mandatory registration', it consists of a fully anonymous process that only ensures that a particular copy of the software can only be installed on one PC," Lutz wrote in his message to the awards organisers, which they subsequently made public.

The Passport service, he wrote, "stands under equally strict guidelines as concerns data privacy, and its structure is already set up in such a way that abuse and unauthorised collection of user data are excluded." Actually, it doesn't necessarily reside under the strictest data privacy regulations — Passport and Microsoft are more likely to want to follow the 'Safe Harbor' arrangement, a set of privacy guidelines about which many EU power brokers are still dubious.

"I kindly request that you withdraw your nomination or definitively prove your allegations," Lutz wrote to the organisers. But the awards committee stood by its choice of Microsoft.

"It's not about the software, it's about a CD with a program that crosses a shop counter, and the user must be able to assume he can use it. That's what he paid for," said Hans Zeger, the head of Arge Daten Austrian Society for Data Protection, one of the sponsors of the awards. "A registration would be nice, but it's not provided for by the law in Austria. It infringes on the rights of the consumer."

"Whatever Microsoft says, when I buy software I have an agreement with a dealer and not with the company that produces it," Zeger continued.

As for Passport, he said, the problem is that it's not clear what happens to the personal data provided by users when they register for the single-login system. European Union guidelines on data protection, he added, require that users be notified which sections of their information will be passed on and to whom.

Microsoft has already faced criticism from privacy groups in the US, who have filed a complaint with the US Federal Trade Commission, saying the software company deceptively uses the Passport service to collect data about users.