U.S. tech company Yahoo Inc is to face a class-action lawsuit in America.  It is accused of illegally intercepting emails sent to Yahoo Mail accounts from non-Yahoo Mail users and using the content to focus advertising and boost revenue.

Yahoo is accused of copying and analysing non-Yahoo Mail users emails, including attachments, in order to create “targeted advertising” for an estimated 275 million Yahoo Mail subscribers.  An injunction was applied for which would bar the alleged interceptions in the interim. In 2014, Yahoo generated 79 percent of its revenue from search and display advertising.

In making her decision, District Judge Lucy Koh said people who sent emails to or received emails from Yahoo Mail subscribers since 2 October 2011 may sue for alleged privacy violations as a group.  The claim will be brought under the U.S. Stored Communications Act and non-Yahoo Mail subscribers based in California may bring an additional claim under California’s Invasion of Privacy Act.  

The class action will allow an estimated 1million members to make a joint claim against Yahoo.  Class actions allow a large number of claimants to bring claims that might otherwise be too costly to bring independently, although they are likely to take only a small share in any financial award that is made.  

A similar claim against Google Inc and its Gmail service, was refused by the same judge just over a year ago.  The Gmail claim failed due to the perceived difficulty in determining which non-Gmail users had consented under Google’s other services.  

In Europe, Facebook is facing the threat of a similar class action following the disclosure of personal information under the Safe Harbour agreement and other privacy infringements.  There is a clear indication that the world needs to pay attention to the privacy of consumers and treat the public with greater care, transparency and respect.  Any failure to do so may cost them financially as well as reputational damage. 

I joined Julie MacDonald on the Arise Business News to discuss this interesting claim as well as Apple’s move into TV.