In April, Microsoft released a non-security update for both Windows 7 and 8. This update, 3022345, created a new Windows service called the Diagnostics Tracking service.
Microsoft told us that it increased the amount of diagnostic data that the Customer Experience Improvement Program (CEIP) can collect to better diagnose problems. It also collected data for third party applications that use the Application Insights service. Application Insights allows app developers to track performance issues, crashes, and other problems of their applications. The Diagnostics Tracking service collects this data and sends it to Redmond.
Since then Microsoft has updated the service twice. Updates 3068708 and 3080149 installed automatically with the normal Windows Update settings. While another update, 3075249, enhanced the User Account Control (UAC) feature to enable it to collect more information from the elevation prompts.
It is all very Windows 10. Users don’t know what’s being sent, and it can’t be readily controlled. There is little chance of interception as the traffic is encrypted. Windows Firewall can blocking the traffic and disabling the service is also possible.
However it is unlikely that many will know or do so. It is not clear why Microsoft is suddenly becoming all obsessive about collecting user data.