Yahoo Settles Ad Placement Lawsuit

SUNNYVALE, Calif. — Yahoo Inc. has settled a class-action suit after unhappy search-advertising customers sued the company over where their pay-per-click ads were showing up.

On Tuesday, lawsuit administrator Rust Consulting, a third-party firm based in Minnesota, sent an email to members of the class that preliminary court approval of the settlement has been granted.

Yahoo customers who sued claimed that when ads they placed through Sponsored Search and Contact Match, they showed up in spyware, parked sites, typosquatting sites and other dark corners of the web. The ads were supposed to appear on "highly targeted" sites.

Yahoo’s clients sued the Sunnyvale company for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.

Yahoo agreed in the accord to offer a new filtering option for ads and to modify how it handles disclosures and click-fraud investigations. It also agreed to develop and offer a way for customers to control where their Yahoo Ads appear.

Yahoo will create an Ad Placement Option for advertisers to guarantee their ads will appear only on sites owned by Yahoo or sites designated as premium partners. That feature should appear early next year but Yahoo has a deadline of Sept. 30 to provide advertisers with that option.

Advertisers also will get better tools for measuring traffic quality and potentially troubling sites bearing their ads.

Yahoo class litigants are eligible for a $20 settlement, as well. The litigants must submit a claim by March 22; those ready to sue Yahoo individually need to exclude themselves from the settlement by Dec. 14.

All told, Yahoo plans to divey out $4.3 million to its clients with the agreement. Attorney fees will reach about $4.2 million.

Yahoo Settlement Agreement

Related:  

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

AV Bulletin: Loopholes and Lawsuits

This roundup provides an update on the latest news and developments on the age verification front as it impacts the adult industry.

Utah 'Porn Tax' Bill Will Head to Governor's Desk

A bill that would tax adult websites and make them liable if minors circumvent geolocation has passed the Utah state legislature and will soon head to the office of Gov. Spencer Cox for signature or veto.

Flirt4Free Co-Founder Gregory Clayman Passes Away

Gregory Clayman, a pioneering figure in the live cam sector and cofounder of the long-running webcam platform Flirt4Free, has passed away.

Pornhub to Restrict Access in Australia as AV Rules Take Effect

Pornhub parent company Aylo will restrict access to its free video-sharing platforms in Australia in response to new age verification regulations, the company confirmed Thursday.

ASACP Announces F2F as 1st Gold Sponsor

The Association of Sites Advocating Child Protection (ASACP) has announced Friends2Follow (F2F) has upgraded its sponsorship and become the organization’s first Gold Sponsor.

House Committee Approves Online Safety Bill With Federal AV Requirement

The U.S. House of Representatives Committee on Energy and Commerce on Thursday passed the Kids Internet and Digital Safety (KIDS) Act, which includes provisions to make age verification by adult websites federal law.

Segpay Adds 'Pay by Bank (UK)' Payment Solution

Segpay has added the Pay by Bank (UK) option to its direct payments solutions.

Federal Judge Orders Refunds for Companies That Paid Trump Tariffs

A judge for the U.S. Court of International Trade on Wednesday ordered U.S. Customs and Border Protection to refund duties paid under the Trump administration’s sweeping program of tariffs.

Creator Verification Platform 'VerifiedCollab' Launches

Performer Eli Thomas has launched VerifiedCollab, a verification platform for creators and producers.

House Committee to Weigh Online Safety Bill With Federal AV Requirement

The U.S. House of Representatives Committee on Energy and Commerce will meet Thursday to consider and potentially amend the Kids Internet and Digital Safety (KIDS) Act, which includes provisions to make age verification by adult websites federal law.

Show More