Yahoo settles with NY AG over marketing practices

Yahoo will change its marketing policy after being told by New York State Attorney Eliot Spitzer that its practices were "neither appropriate nor legally-permissible," the Office of the New York State Attorney said Wednesday.

In March 2002, Yahoo announced that its telemarketing and e-mail campaigns would include customers who had previously opted out of such contact, the State Attorney said in a statement.

All registered Yahoo users were told by e-mail that they had 60 days to reply if they did not want to be included in marketing campaigns. This was despite the fact that users had been asked at registration whether they wanted to receive marketing communications, the statement said.

Yahoo will now have to give these customers clear notice of its policies, with the option to opt-out of e-mail marketing, and will have to remove them from its telemarketing lists. It will also have to pay US$75,000 to cover the costs of the investigation.

In the future, Yahoo has agreed to give customers 30 days notice of any change to its marketing program, and tell them how to opt out or delete their account. Any e-mail message must have a "clear and conspicuous" hypertext link to let consumers revise their preferences or opt out, the State Attorney's office said.

Spitzer was pleased that Yahoo had worked with his office in the investigation and had suspended implementation of its marketing program until the agreement was reached, the statement said.

Yahoo U.K. spokesman Jon Wayth said Thursday that he could not comment on the case as it does not affect U.K. users. Anyone using a yahoo.com account outside the U.S. would not have received the marketing e-mails or telemarketing calls, he said.

The campaign would also have been illegal in the U.K., a spokeswoman for the U.K. Advertising Standards Authority (ASA) said. "Under the codes that we at the ASA enforce, you have to remove someone immediately from marketing lists when they ask. And you can't write to them later and ask if they've changed their mind, either," she said.

Yahoo in the U.S. was not immediately available for comment.

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