Yahoo Settles Email Privacy Lawsuit

Yahoo has agreed to revise some of the language in its privacy policies in order to settle a class-action lawsuit alleging that it wrongly scans email messages for advertising purposes, according to court papers filed on Thursday.

The proposed settlement also requires the company to make some technical changes to the way it scans emails, but doesn't require Yahoo to stop surrounding emails with ads. The agreement also doesn't call for Yahoo to pay monetary damages to Web users whose privacy allegedly was violated, but provides for payments of up to $4 million to the attorneys who brought the case.

If accepted by U.S. District Court Judge Lucy Koh in the Northern District of California, the deal will resolve a lawsuit filed in 2013 by a group of Web users who argued that Yahoo violates federal and state laws by scanning messages without people's consent.

Yahoo's terms of service provide that the company analyzes email in order to display ads, but the people who are suing said that they didn't have Yahoo email accounts, and therefore never agreed to the company's terms of service.

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