In an interview with The Times on Monday, Nadella said the company "had chosen not to squeeze the last drop of revenue from the troves of user data on its Bing search engine and the LinkedIn social network, which it bought in 2016".
LinkedIn, which Microsoft bought for $26 billion (roughly Rs. 1.9 lakh crores), has over 560 million users and Bing is the number 3 search engine globally.
"We don't want to overmonetise. If anything, one of the things we've done is to is to make sure that the utility is maximised for the users," Nadella was quoted as saying.
Nadella's comments "draw a sharp divide between Microsoft and other large American technology companies, which have been criticised for abusing the personal information of their users".
At a Microsoft event in London last week, Nadella called on technology companies to defend users' privacy as human right, urging firms and governments to collectively work together to protect the most vulnerable section in society.
Nadella applauded the European Union's General Data Protection Regulation (GDPR) as first step towards securing data privacy.
"All of us will have to think about the digital experiences we create to treat privacy as a human right," Nadella was quoted as saying.
"GDPR as a piece of legislation, a piece of regulation is a great start and we've done a lot of hard work to become compliant with GDPR."
Amid increasing data breaches, tech giants are busy deliberating on how to ensure privacy and security for the users.
"Customers must be in control of their data. It is our collective responsibility to keep the data safe," the Microsoft CEO had emphasised in May.
"We have the responsibility to ensure that the new-age technology is empowering everyone, creating equitable growth for all while creating employment on the global scale."