Google should proceed with caution, do they really want to get dragged into a debate about tracking user actions to influence search results?
1) They do the same thing. When I have the google toolbar installed and use bing, my clickstream data goes to Google.
2) On a micro level, there is nothing wrong with this at all.
Of course, on a macro level, both sites trample all over user privacy, so you should be using DDG.
Using any Google product, you implicitly agree to them, in exchange, using your data. That's how Google works, and has always worked. That's your payment for using the service.
With Windows - the operating system that you are using - it's an entirely different proposition. For one, you've already paid for it. And secondly, you don't expect the software that you bought to spy on you and give away links you were clicking on in a Google search results page.
Links in a Bing search - sure! That's how search engines work. But tracking my clicks on any other web page, by my OS, that's spyware, plain and simple.
Unless I'm missing something just running Windows isn't enough for MS to do the kind of data collection Google is claiming.
I think this distinction has legal as well as technical implications.
* all with some specific exceptions for perhaps SSL and locally-resolved zones, or something like that.
The big search engines are large enough to show up clearly in any of their competitors statistics (and there are always human teams monitoring the automated process) and should specifically exclude data from their competitors.
For Google to use Bing clickstream or vice versa also perpetuates a vicious circle where bad results from one search engines will spread among the others.
Bing either hasn't acted ethically, or hasn't though through the consequences of absorbing clickstreams of competitors' sites.