Yahoo could face up to $750 million in fines from potential class of 500,000 Sprint users
As many as 500,000 Sprint customers could take part in a class action lawsuit approved this week by a Chicago federal judge related to Yahoo sending unwanted text messages in 2013.
The plaintiffs claim Yahoo sent unwanted welcome messages after other users sent them Yahoo Messenger messages; that violates the Telephone Consumer Protection Act, according to reports.
Business Insider reports the lawsuit was initially brought by Rachel Johnson of Illinois. U.S. District Judge Manish Shah granted class action status to the lawsuit on Monday.
The Washington Post reports if Yahoo is found guilty, the company could face $1,500 in damages per text message amounting to a potential fine of $750 million.
Johnson’s attorney Keith Keogh said, “We appreciate the court’s thorough analysis.”
The Telephone Consumer Protection Act was passed in 1991, and regulates telemarketing including autodial machines as well as the text and fax equivalents.
Yahoo executives met last month to apparently consider selling the company’s Internet businesses including its search platform, Yahoo Internet businesses including Yahoo News, Yahoo Mail and social media site Tumblr, among other holdings. There are also reports that Verizon Communications is considering a potential purchase.
Reuters, siting inside sources and a letter from a major Yahoo shareholder to the board, reported Jan. 5: “Several major Yahoo Inc. shareholders are so concerned the company’s core Internet business could fall in value that they want it sold as soon as possible.”
In an interview with Reuters, Eric Jackson, managing director of SpringOwl Asset Management, called into question the company’s leadership, which answers to CEO Marissa Mayer who took the job in 2012.
“I don’t think the market’s going to give any bump in value as long as the current management is in place,” Jackson said.