A spokesperson for Microsoft said the company collects voice data to provide voice-enabled services for Skype and Cortana and sometimes uses vendors to assist in improving these services.
"We realized, based on questions raised recently, that we could do a better job specifying that humans sometimes review this content," the spokesperson said in an emailed statement.
The company is the latest tech giant to admit to such practices, after media reports on Tuesday said Facebook has been paying outside contractors to transcribe audio clips from users of its services.
"We've updated our privacy statement and product FAQs to add greater clarity and will continue to examine further opportunities to improve," the Microsoft spokesperson said.
Tech companies in the United States have been facing broad criticism from lawmakers and regulators over their privacy practices.
(Reporting by Nivedita Balu in Bengaluru; Editing by Maju Samuel)