ANSWERING CRITICS OF its privacy policies, Microsoft said Thursday it would offer an update to its Web browser that would let users reject third-party cookies.

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When first used, the "cookie management" feature will offer a message asking the user whether to accept a cookie -- tiny files that are sent to computers over the Web and are used by merchants and others to determine users' preferences and Internet histories.

Microsoft's Internet Explorer browser will allow users to monitor cookies that are sent to their system. The new technology, which went into a limited beta this week, will heighten awareness of cookies as well as explain the difference between cookies sent from a Web site and those that come from third parties. Browsers from Netscape and Opera also offer this functionality.

"This also will enable people to delete cookies with a simple button," said Microsoft Chief Operating Officer Bob Herbold. "Our overall focus here is the fact that a lot of consumers aren't technical and need to understand these things better. They are worried about privacy. They know that a lot of things are going on with their hard drive, and want to know what they are."

Microsoft, which released the latest version of its browser, Internet Explorer 5.5, last week, has been accused of not giving user privacy a high priority in its products. Users of its Hotmail Internet email service are so bombarded with third-party solicitations that the Redmond, Wash. company recently added a "Bulk Mail" filter.

One industry group, the Washington-based Computer and Communications Industry Association (CCIA), questioned Microsoft's motives. The organization, which has been highly critical of Microsoft's business practices, particularly during the software giant's antitrust trial, said Microsoft is free to collect reams of user information via cookies because its Web site is "the central repository for information related to its ubiquitous operating system, browser, security patches, and bug fixes; most PC users have no choice but to visit Microsoft.com."

"This looks very much like another effort by Microsoft to utilize its monopoly power in the Internet browser market to establish dominance in an adjacent market -- namely, the market for personal data and information," said Ed Black, the CCIA's president and CEO, in a prepared statement. "While CCIA has strongly supported industry-wide efforts to protect consumers' privacy, we do not believe that such information should be available without restriction to some, while requiring consumers to opt in to providing information to everyone else."

According to Herbold, Microsoft moved forward with the cookie management update based on feedback from consumers, privacy advocacy groups, and state attorneys general, who met at a conference in Seattle last month.

"It's a great example of consumer privacy being taken seriously and managed responsibly in the industry, based on consumer input," Herbold said.