Targeted Advertising Lands Google, Yahoo! In Court

Michael Teague |

The New York Times reported on Tuesday that Yahoo! (YHOO) and Facebook (FB) had both filed respective suits in the Foreign Intelligence Surveillance Court that would permit the companies to reveal information to their users about the quantity and nature of data requests they have received from the intelligence establishment.

They join Microsoft (MSFT) and Google (GOOG) , who have already filed such suits, in what is likely at least in part an attempt to reassure users that their cooperation with extensive National Security Agency (NSA) domestic surveillance programs, recently brought to the public’s attention from the Edward Snowden leaks, was unwilling.

Indeed, these companies have reason to worry about the public relations consequences of their cooperation with the NSA, to whatever extent it existed, especially because so many of them made such an overt display of their objection to controversial legislative measures like SOPA and PIPA that, had they passed, would have legalized the considerable breaches of privacy that, as we now know, have been taking place for years.

But while much has been made of these suits filed by tech companies in the super-secretive FISA court, less attention has been given to suits recently filed against Google and Yahoo! Two suits filed in a Marin County, California-court in June are alleging that the two tech companies unlawfully intercepted emails from users outside of their email systems.

The plaintiffs in the suit, Stuart Diamond, David Sutton, and Roland Williams, use neither Google’s or Yahoo’s email services, but claim that the tech firms violated the California Invasion of Privacy Act (CIPA) by analyzing emails for targeted advertising. The men decided to take action when they noticed the coordination between advertisements that would pop up in their web browsers, and emails they had exchanged with friends who were either users of Gmail or Ymail.

Google and Yahoo! Are both adept at mining emails in order to target advertising at them. But the plaintiffs are claiming that the companies have invaded users’ privacy in violation of the CIPA. According to a statement from their lawyer, "The invasion of privacy by wiretapping or, in the alternative, eavesdropping, caused by Google and Yahoo's! continual and pervasive use of such devices seriously threatens the exercise of personal liberties”.

Google’s official response to the filing stressed the fact that “ad targeting in Gmail is fully automated, and no humans read users' emails or Google account information in order to show advertisements."

Indeed, Google makes the vast majority of its revenue from advertisements, and the company’s practice of mining emails for the sake of advertisers should be no secret by now. The current case, however, is a test of the legal ramifications of modern hi-tech advertising. But the consequences for Google and Yahoo! are twofold: whatever the outcome of the case, it could create more negative publicity for the company. More significantly, though perhaps less likely, in the worst-case scenario it could challenge an important source of revenue for both companies.

The class action lawsuit, filed on behalf of all non-Google/Yahoo! Users in California, went to court last week.

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Symbol Name Price Change % Volume
FB Facebook Inc. 132.07 2.07 1.59 19,088,794
GOOG Alphabet Inc. 799.37 2.40 0.30 1,266,181
MSFT Microsoft Corporation 59.66 2.41 4.21 80,032,206
PUODY Promotora y Operadora de Infraestructura SA de CV 226.88 -2.12 -0.93 51
YHOO Yahoo! Inc. 42.17 -0.21 -0.50 7,194,168


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