Yahoo Japan under fire for its ‘rating system’

Bloomberg

Some users of Yahoo Japan Corp. are rising up against Japan’s biggest web portal after the rollout of a new rating system that’s being compared with a social-scoring initiative in China.
The 48 million people with a Yahoo! Japan ID will have to opt-out within a privacy settings webpage if they don’t want to be rated. The score is based on a variety of factors and is calculated based on inputs such as payment history, shopping reviews, whether a user canceled bookings and the amount of identifiable personal information. Unless users opt out, their ratings may be accessible to freelance jobs site Crowdworks Inc., Yahoo’s bike-sharing service and other businesses.
Yahoo Japan, partly owned by SoftBank Group Corp., said users consented to the program when they first registered their IDs, eliminating the need for opt-ins.

Makoto Niida, a longtime Yahoo user, opted out of the rating system when he learned about it. “It’s a big deal that the service was enabled by default,” Niida said. “The way they created services that benefit businesses without clear explanations to their users reminds me of China’s surveillance society.”
Yahoo’s new credit-score program follows efforts by Mizuho Financial Group Inc., NTT Docomo Inc. and other companies to use algorithms to assign ratings to consumers. Japan doesn’t have a system similar to FICO in the US, so businesses in the world’s third-largest economy have come up with their own solutions to determine financial trustworthiness. Yahoo’s program shares some elements with China’s Sesame Credit, a subsidiary of Alibaba Group Holding Ltd., according to Masahiko Shoji, a professor at Musashi University specializing in policy and governance issues.
“When China’s scoring system started, people said it was scary, but now they’re starting to realize that it’s being turned into a business in Japan,” Shoji said, adding that Yahoo makes it difficult for users to find where to opt out on its website.
Yahoo Japan officially launches the scoring service on July 1. A pilot program with 13 companies provided high-scoring users with special offers and matched preferred freelancers to companies, Yahoo said in a statement on June 3.
Yahoo Japan, partly owned by SoftBank Group Corp., said users consented to the program when they first registered their IDs, eliminating the need for opt-ins. Yahoo said it uses the score within its services, but won’t share personal information without additional user consent.
“We are aware of the opinions on social media,” the company said in an emailed statement. “We regret causing any concerns, and will work to improve our communication around this issue.”