Yahoo Sued for Allegedly Intercepting E-Mail

Yahoo! Inc. (YHOO) was accused in a lawsuit of intercepting e-mails sent to users of its mail service and using personal information to profit from related advertisements.

The plaintiff seeks damages of $5,000 for each person whose privacy was allegedly invaded, according to a complaint filed Nov. 15 in federal court in San Jose, California. Information gleaned by scanning communications between users and non-users is used for tailoring advertisements to them, increasing Yahoo’s revenue, according to the filing, which cites the company’s published policies for its new e-mail service.

“Yahoo’s automated systems scan and analyze all incoming and outgoing communications content sent and received from your account,” says the policy, according to the complaint. The purpose is to “match and serve targeted advertising and for spam and malware detection.”

Lawsuits against Internet companies and social networks are rising as use of the Web balloons and users become more aware of how much personal information they are revealing, often without their knowledge. Google Inc. and LinkedIn Corp. (LNKD) also are facing accusations of intercepting communications for their own profit at the expense of users or non-users.

Photographer: David Paul Morris/Bloomberg

Yahoo! Inc. signage is displayed at the company's headquarters in Sunnyvale, California. Close

Yahoo! Inc. signage is displayed at the company's headquarters in Sunnyvale, California.

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Photographer: David Paul Morris/Bloomberg

Yahoo! Inc. signage is displayed at the company's headquarters in Sunnyvale, California.

“As a matter of policy, Yahoo does not comment on ongoing litigation,” Sarah Meron, a company spokeswoman, said yesterday in an e-mail.

Class Sought

Brian Pincus, the plaintiff, seeks to represent non-Yahoo customers whose e-mail was intercepted in a class-action, or group lawsuit.

Yahoo previously asked in a court filing that earlier lawsuits over scanning of e-mail for targeted advertising be treated as related cases.

Ads bring in three-quarters of Yahoo’s revenue, according to the complaint. With more than 275 million customers globally, Yahoo mail is one of the largest web-based e-mail services, the plaintiff said.

The case is Pincus v. Yahoo! Inc., 13-cv-05326, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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