http://windows.microsoft.com/en-US/windows-live/microsoft-services-agreement
Some of this is just scary. There is one section where it begins with
'Your privacy is important to us..."
Then there is this paragraph:
5.2. Does Microsoft disclose my personal information outside of
Microsoft? You consent and agree that Microsoft may access, disclose, or
preserve information associated with your use of the services, including
(without limitation) your personal information and content, or
information that Microsoft acquires about you through your use of the
services (such as IP address or other third-party information) when
Microsoft forms a good faith belief that doing so is necessary (a) to
comply with applicable law or to respond to legal process from competent
authorities; (b) to enforce this agreement or *protect the rights or
property of **Microsoft**or our customers*; or (c) to help prevent a
loss of life or serious physical injury to anyone.
My bet is that (b) pretty much allows them to justify anything.