WGA phones home, even when you don't install it.

WGA - Windows Genuine Advantage. A software agent that runs on installs of Windows to make sure that you're not using a pirated copy. Unless you let it install itself, you'll have a hell of a time updating your system because a running WGA agent is required to run Windows Update. Of course, you can go to the Knowledge Base and download the updates one by one, but when you take into account how many updates there are, you may as well install it yourself.

Interestingly, if you refuse to let the WGA hotfix/update/agent/spyware install itself it phones …

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