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Post date: October 1 2003

Settlement With Internet Company Ensures Transparency In Email Marketing Practices

New York State Attorney General Spitzer today announced a settlement with Yahoo! Inc., the internet portal company based in Sunnyvale, California, that will protect consumers from unwanted email and telemarketing campaigns and ensure that they understand and control marketing solicitations.

The agreement with Yahoo! follows an investigation into changes to the company's marketing program that were announced in March of 2002 and that would have included in Yahoo!'s telemarketing and email campaigns consumers who already opted out. Yahoo will now be required to give these consumers clear notice of Yahoo!'s policies, along with the ongoing opportunity to opt-out of email marketing and Yahoo! will be prohibited from telemarketing to these consumers. In the spring of 2002, Yahoo! sent email messages to registered users indicating that the company was revamping its marketing program and that after sixty (60) days would begin marketing to all registered users, unless they informed the company that they did not wish to receive marketing solicitations. Prior to the March 2002 announcement, during the registration process, Yahoo! had asked consumers a single "yes" or "no" question as to whether they wished to receive any marketing communications.

"It is neither appropriate nor legally permissible for a company to compile a database of personal information through an online registration process and then attempt to use the information for telemarketing purposes to target consumers who have stated that they do not want to receive solicitations. Morever, consumers need and the law requires adequate and effective notice about changes to the way a company utilizes a consumer's personal information," Spitzer said. "I am pleased that Yahoo! worked with my office in this investigation and agreed to suspend implementation of the program until we were able reach this agreement."

Under the agreement, Yahoo! will not telemarket to consumers who supplied their telephone number as part of their Yahoo! account information and who declined to receive marketing communications under the previous marketing program. The agreement requires Yahoo! to provide consumers with notice 30 days prior to the effective date of any changes to its marketing program and inform them how to "opt-out" or delete their account. Yahoo! must include within the text of any email solicitation sent to consumers, a "clear and conspicuous" hypertext link to an "unsubscribe" page, where consumers may revise their marketing preferences or "opt-out" of the marketing program entirely. Yahoo! will pay $75,000 to cover the costs of the investigation.

This case was handled by Assistant Attorney General Don Tellock of Attorney General Spitzer's Internet Bureau.