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This always makes me laugh, when people talk about how Microsoft is spying on you, yet they have Google Email accounts. (Hint: Google READS your email to target ads to you.)
Same goes for Apple. And your Internet Provider.

MS did this to try to regain marketshare. Face it, people are not upgrading PCs like they used to... they can get internet and whatnot on their TVs, Phones, Laptops, etc.
Windows Phone isn't even a blip on the Phone Radar Screen. And Windows 8 has been a Marketing Disaster. (Although it is a very stable OS, and can be made to work like Windows 7)

MS is going for Gold on this. The New CEO is trying to turn this behemoth around, and it is working. Everything is different. The whole Company Philosophy has changed.
The reason behind FREE is MS wants to make a big splash. Most will upgrade for FREE. And then there is the fact they want to Unify the Phone, Tablet, XBOX, and Desktop to all run the same OS
People like consistency. The goal is to build 1 App that runs all ALL devices. And to cause you to want to use their services, so you are more likely to buy MS products.
And if you do that, Developers will make more Apps, Programs... causing more market share.
They are so serious about making Win 8 go away, they even went to Windows 10 as the next number. Ha! I LOL at the people I hear that say to me "I HATE Windows 8!" but when pressed I find out they actually have never used it, but their friend has a son that used it and he said it stinks! (Insert Eye Roll here)

No one forces you to use Windows. There are other alternatives out there. The supposed spyware that everyone complains about can be turned off.
My upgrade last night was painless. I had to agree to the EULA, hit Continue, wait an hour for installation to finish, and then log on. That easy.