Yahoo, New York AG Settle

Yahoo has settled with New York Attorney General Eliot Spitzer over his investigation into changes in the Sunnyvale based Web portal’s marketing practices made more than a year ago, Spitzer’s office said yesterday.

However, though it has been widely reported that Yahoo agreed to change its practices, it is not clear that this is the case.

The settlement stems from an investigation begun after Yahoo in March 2002 began e-mailing the 200 million registered users of its free e-mail service to notify them that it was opting them into receiving information from Yahoo in 13 marketing categories. The notices gave users 60 days to opt out.

A 14th category under user preferences in which users consent to receive third party ads was checked “no.”

Some users voiced anger over the switch, prompting the investigation.

Under the settlement with Spitzer’s office, Yahoo has agreed not to telemarket to users who have supplied their telephone numbers as part of their Yahoo account information, but who declined to receive marketing communications under the previous program.

When asked if Yahoo had ever planned to telemarket to these users, Yahoo spokeswoman Nissa Anklesaria said: “We had no plans then and we currently have no plans to market our consumer products via phone.”

Also under the settlement, Yahoo has agreed 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, Spitzer’s office said. The original notice already informed consumers how to opt out, and gave them 60 days.

Also under the settlement, Yahoo must include within the text of any e-mail 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. However, Yahoo included such links in the original notices.

When asked if the notice requirements represent a change in Yahoo’s marketing practices, Anklesaria said: “This represents enhancements and additional notice to a subset of out users about communications regarding Yahoo products and services.”

Yahoo has agreed to pay $75,000 to cover the costs of the investigation, Spitzer’s office said.

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