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Non-Yahoo Mail account holders have accused the internet firm of analysing emails sent to Yahoo Mail accounts to create “targeted advertising” for its 275 million subscribers.
According to Business Insider, search and display advertising accounted for 79% of Yahoo’s revenue in 2014.
The plaintiffs applied for class action status on 5 February 2015, alleging that Yahoo copied emails, extracted keywords and reviewed links and attachments in violation of the federal Stored Communications Act and California’s Invasion of Privacy Act.
The lawsuit alleged Yahoo provided no way for non-Yahoo Mail users to opt out of Yahoo’s scanning practices.
The plaintiffs are seeking compensation from Yahoo and a court injunction to block any future attempts to intercept and analyse messages sent to Yahoo Mail accounts. They also request Yahoo identifies everyone to whom it sold or gave data collected from non-Yahoo Mail subscribers.
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US district judge Lucy Koh in San Jose, California, ruled that people who sent emails to or received emails from Yahoo Mail subscribers since 2 October 2011 may sue as a group for alleged privacy violations under the federal Stored Communications Act.
She also said a class of non-Yahoo Mail subscribers in California since 2 October 2012 may sue as a group under California's Invasion of Privacy Act.
Legal commentators said a class action lawsuit can make it easier for the group to receive more compensation and more wide-ranging resolutions at a lower cost.
Koh rejected Yahoo's argument that some plaintiffs gave tacit consent by continuing to send emails to Yahoo subscribers after learning how the company used the information.
“Yahoo may have to, as a practical matter, adjust its scanning practices on an individual basis,” Koh wrote in her ruling.
“That does not, however, change the fact that plaintiffs seek uniform relief from a common policy Yahoo applies to all class members,” she added.