Yahoo reins in behavioral targeting, slightly

On the heels of a congressional inquiry, Yahoo today announced a change to its privacy policy that will give people a little more control over how their data are collected online.

Later this month, users will have the ability to turn off behaviorally targeted ads on properties, expanding the tracking opt-out that Yahoo (NASDAQ: YHOO) had previously offered on its network of third-party sites.

The move comes in response to a letter of inquiry from leaders of the House Energy and Commerce Committee, who had asked 33 Internet service and content companies for details on how they track people’s Web activities to target advertising. That letter was the latest step in an ongoing fact-finding mission as lawmakers seek to ferret out the real threat to individual privacy that new advertising technologies pose.

Of course, for the watchdog groups that have been trying to hold online advertisers’ feet to the fire, Yahoo’s move falls short of the mark. Privacy advocates have long pushed for an opt-in policy that would only allow Web firms to track user behavior after receiving expressed permission.

Yahoo may have felt a greater need than most of the other recipients of the letter to provide a substantive response that included a change in its privacy policy, albeit a minor one. The Department of Justice is currently reviewing its ad deal with its larger rival Google. While the review centers on antitrust concerns, opponents of the deal (including Microsoft) have warned that a pooling of resources by two of the largest ad players on the Web poses a serious threat to consumer privacy.

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