As documented by Ed Bott at ZDNet, the updated policy appears to address fears over data collection in Windows 10, and on services such as OneDrive and Outlook. In many cases, Microsoft has added specifics and examples to show exactly where and why it accesses personal data.
For instance, one passage previously described how Microsoft will “access, disclose and preserve” personal data such as “the content of your emails, other private communications, or files in private folders” for law enforcement, customer protection, or maintenance purposes. The revised policy replaces the vague “private communications” with “in Outlook.com,” and adds the phrase “in private folders on OneDrive.” In other words, Microsoft isn’t spying on the contents of your local storage or helping itself to all manners of communication.
Notably, Microsoft has not touched its section on telemetry and error reporting. Windows 10 includes mandatory collection of basic telemetry data, and Microsoft has defended the practice as saying it’s necessary to improve the product.