From CNN Money: [money.cnn.com ]

The gist: browsers will soon have an option to turn off behavioral tracking ads. To make the button work, you need the ad networks to comply. So the W3C and others have been working out a negotiated deal between privacy advocates and the ad networks. Google, Yahoo and others have agreed to comply as long as the DNT option is NOT turned on be default. The deal is not yet finalized.

So MSN has announced that IE10 will have DNT turned on by default, and Google is threatening to ignore DNT requests from IE10. If the current deal the W3C has worked out becomes final, then IE10 would not be in compliance and no one's sure whether Google would be within their rights to not comply with that browser.

The beauty of MSN's strategy, of course, is that they will also lose by turning DNT on. This makes MSN look like the knights of privacy, and Google look like the jerk who was happy to comply only if most users didn't know this thing existed:

"It's not clear to what extent we'll get an agreement on this," Mayer told CNNMoney. "One of Google's representatives said on the call that the company will be able to do whatever it wants anyways. I'm stunned at how transparent some of these companies were -- they just want to minimize the number of Do Not Track users, period."

And Google's plans to ignore IE10 requests could backfire spectacularly on them:

Do Not Track participation is voluntary, but once a company signs on -- as Google has -- compliance is enforced by the Federal Trade Commission. Google and other companies that signed the industry's agreement could land in regulatory hell if the FTC decides that ignoring IE10's Do Not Track requests constitutes false advertising.

And the FTC is already on their case:

the Federal Trade Commission is considering bringing sweeping antitrust charges against the company.

MSN's strategy here makes me think of how Russia dealt with Napoleon. They're taking a sizeable hit in order to force Google to take a much bigger one. If Google complies, imagine what that'll do to Adwords revenues, not to mention stock prices. And if they don't comply, their best outcome will be a smeared reputation (I'm sure MSN has a press strategy worked out already), and their worst case outcome will be a government lawsuit. And no one knows better than MSN what that's like.

Edited to correct BBcodes.