In Decemeber 2008 Microsoft stated that it was considering changing its data retention policy in relation to its search engine, Live.
Microsoft are suggesting that they may reduce it to just 6 months, based on guildines (but not laws) put out by the EU.
But, the catch is that Microsoft will only do this if Google do, even though Yahoo! has already stated that it will reduce it to 3 months for some data and 6 months, at most, for the rest of the data.
Google have only recently been haggled down from 24 months to 18 months and so are unlikely to do this.
The EU has a body which issues guidelines on this, commonly known as “Article 29, Working Party”. Those guidelines should be turned into legislation, forcing the search engines to comply, rather than asking them nicely and negotiating with them.