Entering the plea in U.S. District Court at Seattle, former Microsoft software architect Alex Kibkalo admitted to sending unreleased software code to a French technology blogger.
Kibkalo, 34, pleaded guilty to theft of trade secrets and is scheduled to be sentenced in July. Kibkalo also agreed to repay Microsoft $22,500, though it's unclear how he came to owe the Redmond corporation the money.
In an odd twist, Kibkalo's prosecution prompted Microsoft to pledge not to comb through user's email if investigators suspect the user stole from Microsoft. Microsoft investigators did so to catch Kibkalo; they apparently also hoped to identify the French blogger who received the stolen information.
Having spent seven years with Microsoft, Kibkalo leaked Windows 8 code to the blogger in mid-2012, prior to the software's release.
Microsoft brought its concerns to the FBI in July, nearly a year after corporate investigators suspected Kibkalo had leaked parts of Windows 8. In the plea agreement signed Monday, Kibkalo admitted to passing the blogger code for Windows 8 as well as a software development kit used by Microsoft to protect against counterfeiting.
Microsoft came to believe Kibkalo sent the software development kit to the French blogger and encouraged the blogger to share it online so others could crack protections on Microsoft products, an FBI agent said in charging papers.
Corporate investigators confronted Kibkalo in September 2012 during an interview in which he's alleged to have admitted to sharing the software. Kibkalo admitted to sharing unreleased Windows programs as well as company memos and documents; Microsoft investigators claim he was angry after a poor performance review.
While the blogger took pains to protect his identity - he claimed falsely to be in Quebec and used an assumed name online - a Microsoft team dubbed Trustworthy Computing Investigations attempted to track the blogger down. Doing so, investigators landed Microsoft in hot water with some critics.
Releasing a statement Friday, Microsoft General Counsel Brad Smith said the company has changed its investigation policy and will no longer raid users' inboxes and Instant Messenger accounts in search of intellectual property thieves.
"Effective immediately, if we receive information indicating that someone is using our services to traffic in stolen intellectual or physical property from Microsoft, we will not inspect a customer's private content ourselves," Smith said in the lengthy statement, available here. "Instead, we will refer the matter to law enforcement if further action is required."
Smith went on to say Microsoft, and society at large, have entered a "post-Snowden era" while defending the tactics Microsoft now claims to have abandoned.
"While our own search was clearly within our legal rights, it seems apparent that we should apply a similar principle and rely on formal legal processes for our own investigations involving people who we suspect are stealing from us," Smith continued. "Therefore, rather than inspect the private content of customers ourselves in these instances, we should turn to law enforcement and their legal procedures."
While searching the blogger's Hotmail account, Microsoft investigators found an email from Kibkalo in which he shared Windows 8 "hot fixes" through an online hosting system. Windows 8 had not been released to the public at the time, and was the subject of much speculation in the industry.
Prosecutors and Kibkalo have agreed to recommend a three-month sentence to federal detention. A felony conviction will prevent Kibkalo from being in the United States legally.
Currently in custody, Kibkalo is scheduled to be sentenced July 1 by U.S. District Judge John Coughenour at the federal courthouse in Seattle.