Jump to content

Yahoo! mandatory use of AI on all consumer services and content

From Consumer Rights Wiki

In 2025, Yahoo! updated their Terms of Service, requiring users to consent to sharing their account data, including private email inbox contents, with third-party AI providers such as Microsoft Copilot and Anthropic's Claude.[1] The only way to opt out is to close the account entirely. Users couldn't decline before the data was shared because the terms took effect upon continued use of the service.[1] Yahoo's properties reach nearly 250 million monthly visitors in the United States.[2]

Background

[edit | edit source]

Yahoo was acquired by Apollo Global Management in September 2021 for $5 billion after Verizon sold 90% of its stake in the company. Verizon retained a 10% share.[3][4] Under CEO Jim Lanzone, Yahoo has focused on its data and content assets across e-mail, search, and finance products.[2]

Yahoo has forced e-mail scanning consent before. In June 2013, Yahoo retired Mail Classic and required all users to switch to the new Yahoo Mail, which scanned e-mail content to display targeted advertising. Users who refused were told to download their mail via IMAP or close their accounts.[5] The 2025 update expands the scope from in-house advertising scans to sharing inbox contents with external AI companies.

On 27 January 2026, Yahoo launched Yahoo Scout, an AI answer engine embedded across Yahoo Mail, Search, News, Finance, Sports, and Shopping. The product uses Anthropic's Claude large language model (LLM) and Microsoft Bing's grounding API, described by Yahoo as "fueled by Yahoo's unique data, content, user insights and deep search history."[2]

Terms of Service update

[edit | edit source]

The updated ToS, dated 15 May 2025 (with a later revision on 2 January 2026), added a provision within Section 6, titled "Content in the Services, License Grant to Yahoo and Consent to Use of AI."[1]

Section 6 states:

"Some of our Services have features and functionality powered by our trusted third-party AI providers ('AI Providers'). AI-powered chat service provided by Microsoft Copilot relies on search services from Bing. By utilizing our Services, you consent to sharing data that you provide to us, or that resides within your Yahoo account, including your Yahoo Mail inbox with our AI Providers for the purpose of enhancing features within our Services made available to you."[1]

The provision covers "data that you provide to us, or that resides within your Yahoo account, including your Yahoo Mail inbox."[1]

License grant

[edit | edit source]

Section 6(c) grants Yahoo a "worldwide, royalty-free, non-exclusive, perpetual, irrevocable, transferable, sublicensable license" to use, reproduce, modify, prepare derivative works, and distribute user content.[1] The ToS simultaneously instructs users: "You also agree not to enter sensitive personal information into any AI powered query."[1] Because Yahoo's AI features automatically scan incoming e-mail, users have no control over what sensitive information external senders transmit to them, making this restriction impossible to comply with in practice.

Opt-out limitations

[edit | edit source]

No granular opt-out for AI data sharing exists. Yahoo's "About Your Choices" privacy page doesn't mention any mechanism to refuse AI processing of account data.[6] Yahoo provides a toggle to turn off "AI-powered message summaries" in the mail app settings.[7] Disabling this toggle hides the summary display but doesn't revoke the license granted in the ToS or prevent data from being shared with the named AI providers.[1]

The arbitration clause in Section 14 includes a 30-day opt-out window (via e-mail to [email protected]), but that window applies only to the arbitration agreement itself, not to the AI data-sharing provision.[8]

Data portability barriers

[edit | edit source]

Yahoo doesn't offer a Google Takeout equivalent for bulk e-mail export. When users close their accounts, Yahoo deactivates them from its registration database within roughly one month, but backup copies "may remain in back-up storage for some period of time."[9] The Yahoo Privacy Dashboard can export data, but it produces raw JSON files with up to thirty days of processing time; these files can't be imported into standard e-mail clients.[10]

Users who want to download their emails via IMAP must generate app-specific passwords and configure a third-party desktop client, a process impractical for non-technical users with decades of stored correspondence.[11]

Yahoo's response

[edit | edit source]

Yahoo has framed the ToS changes as necessary to power new product features. The Yahoo Scout press release positions the tool as delivering "conversational answers" across all Yahoo properties.[2] Yahoo hasn't responded to consumer complaints about the lack of a granular opt-out.

The ToS is ambiguous about whether user data is used to train AI models or only to process queries. The provision says data is shared "for the purpose of enhancing features within our Services," but it doesn't prohibit AI providers from using the data for model training.[1]

Lawsuit

[edit | edit source]

ConnectID class action

[edit | edit source]

In April 2025, Caplan v. Yahoo Inc., No. 1:25-cv-02943, was filed in the Southern District of New York alleging that Yahoo's ConnectID advertising tool tracks users via e-mail-based identifiers across publisher domains without consent.[12][13] The complaint alleged violations of New York consumer protection statutes and the Pennsylvania Wiretapping and Electronic Surveillance Control Act, along with common law claims for unjust enrichment.[12] The suit claimed ConnectID tracked roughly 300 million users.[14]

On 15 April 2025, the court consolidated the Caplan case under Baker v. Yahoo Inc., No. 1:25-cv-02797 (S.D.N.Y.).[15] Yahoo filed a motion to dismiss on 26 September 2025.[15] The lawsuit was not dismissed but, on 26 August 2026, the court granted Yahoo's motion from 30 January to compel arbitration for five of the six plaintiffs involved in the lawsuit.[16]

Arbitration and class action waiver

[edit | edit source]

Section 14 of the ToS imposes a binding arbitration agreement and class action waiver on all U.S. users.[1] The provision states:

"CLASS ACTION WAIVER FOR U.S. USERS. THESE TERMS DO NOT ALLOW CLASS OR COLLECTIVE ARBITRATIONS... ARBITRATION OR COURT PROCEEDINGS HELD UNDER THESE TERMS CANNOT BE BROUGHT, MAINTAINED OR RESOLVED ON BEHALF OF OR BY A CLASS."[1]

The ContractsProf Blog described this as "the most confusing arbitration provision yet," noting the complex batch arbitration process for 25 or more similar claims.[8]

CNIL enforcement (France)

[edit | edit source]

On 29 December 2023, the French data protection authority (CNIL) fined Yahoo €10 million euros for failing to respect users' cookie consent choices and for not allowing Yahoo Mail users to freely withdraw their consent to trackers. The decision was published on 18 January 2024.[17] In both cases, Yahoo conditioned access to its e-mail service on consent to data processing.

Consumer response

[edit | edit source]

Yahoo's AI features replace e-mail subject lines with AI-generated summaries, overriding the sender's original text.[7] In July 2025, Yahoo also reduced free mail storage from 1TB to 20GB, a 98% cut, with the cap enforced by 27 August 2025.[18]

By contrast, other major platforms that faced similar backlash reversed course. Google denied using private Gmail content to train its Gemini AI model after a November 2025 viral scare triggered by a retracted Malwarebytes report.[19] Adobe reversed its June 2024 ToS changes and explicitly stated it doesn't train generative AI on customer content.[20] A January 2025 class action against LinkedIn alleging AI training on private messages was voluntarily withdrawn after LinkedIn showed evidence it had not used subscribers' messages for training.[21]

See also

[edit | edit source]

References

[edit | edit source]
  1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 "Yahoo Terms of Service". Yahoo!. 2 Jan 2026. Archived from the original on 6 Feb 2026. Retrieved 6 Feb 2026.
  2. ↑ 2.0 2.1 2.2 2.3 "Introducing Yahoo Scout, a New AI Answer Engine". Yahoo!. 27 Jan 2026. Archived from the original on 27 Jan 2026. Retrieved 2 Jul 2026.
  3. ↑ "Apollo Funds Complete Acquisition of Yahoo". Apollo Global Management. 1 Sep 2021. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  4. ↑ Heater, Brian; Lunden, Ingrid (1 Sep 2021). "Apollo completes its $5B acquisition of Verizon Media, now known as Yahoo". TechCrunch. Archived from the original on 1 Sep 2021. Retrieved 14 Sep 2026.
  5. ↑ Constine, Josh (2 Jun 2013). "Yahoo Shuts Down Mail Classic, Forces Switch To New Version That Scans Your Emails To Target Ads". TechCrunch. Archived from the original on 2 Jun 2013. Retrieved 28 Mar 2026.
  6. ↑ "About Your Choices". Yahoo!. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  7. ↑ 7.0 7.1 "Turn AI-powered message summaries on or off in New Yahoo Mail". Yahoo!. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  8. ↑ 8.0 8.1 Telman, Jeremy (27 Jun 2025). "Yahoo Has Released the New Terms of Service with the Most Confusing Arbitration Provision Yet!". ContractsProf Blog. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  9. ↑ "Data Storage and Anonymization". Yahoo!. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  10. ↑ "View and manage data associated with your account". Yahoo!. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  11. ↑ "Generate and manage 3rd-party app passwords". Yahoo!. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  12. ↑ 12.0 12.1 Eckert, Brian (21 Apr 2025). "Yahoo Privacy Lawsuit Claims Company Secretly Collects User Data". Milberg. Archived from the original on 13 May 2026. Retrieved 14 Sep 2026.
  13. ↑ Rattigan, Kathryn M. (10 Apr 2025). "Yahoo ConnectID Faces Class Action Over Email Address Tracking as Alleged Wiretap Violation". National Law Review. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  14. ↑ "Class action accuses Yahoo of secretly tracking millions through email-based IDs". Top Class Actions. 13 Jun 2025. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  15. ↑ 15.0 15.1 "Baker v. Yahoo Inc., No. 1:2025cv02797". Court Listener. 15 Apr 2025. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  16. ↑ Kote, Denise (26 Aug 2026). "Memorandum & Opinion — #103". Court Listener. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  17. ↑ Baldassari, Valentine (18 Jan 2024). "Yahoo Fined €10M by France's Data Protection Watchdog". Bloomberg Law. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  18. ↑ Leslie, Corina (5 Aug 2025). "Yahoo Mail Storage Shrinks from 1 TB to 20 GB: What You Need to Know". ZeroBounce. Archived from the original on 20 Apr 2026. Retrieved 14 Sep 2026.
  19. ↑ Tangermann, Victor (24 Nov 2025). "Google Denies Reading Your Gmail to Train Its AI". Futurism. Archived from the original on 8 Mar 2026. Retrieved 14 Sep 2026.
  20. ↑ Belsky, Scott; Rao, Dana (10 Jun 2024). "Here's what to know about Adobe's Terms of Use updates". Adobe. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
  21. ↑ "LinkedIn AI Training Data Lawsuit Dismissed". PYMNTS.com. 31 Jan 2025. Archived from the original on 15 Sep 2026. Retrieved 14 Sep 2026.
Retrieved from "https://consumerrights.wiki/index.php?title=Yahoo!_mandatory_use_of_AI_on_all_consumer_services_and_content&oldid=67240"