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There are a few serious problems here. The big problem is that Windows 8 is configured to immediately tell Microsoft about every app you download and install. This is a very serious privacy problem, specifically because Microsoft is the central point of authority and data collection/retention here and therefore becomes vulnerable to being served judicial subpoenas or National Security Letters intended to monitor targeted users. This situation is exacerbated when Windows 8 is deployed in countries experiencing political turmoil or repressive political situations.This problem can however get even more serious: It may be possible to intercept SmartScreen’s communications to Microsoft and thus learn about every single application downloaded and installed by a target.
We can confirm that we are not building a historical database of program and user IP data," a spokesperson told El Reg. "Like all online services, IP addresses are necessary to connect to our service, but we periodically delete them from our logs. As our privacy statements indicate, we take steps to protect our users’ privacy on the backend. We don’t use this data to identify, contact or target advertising to our users and we don’t share it with third parties."