A Hong Kong lawmaker had alleged that Yahoo's Hong Kong branch provided information to Chinese prosecutors that helped convict journalist Shi Tao, sentenced to 10 years in jail in 2005.
The privacy commissioner's office said in a statement it concluded Yahoo Hong Kong didn't violate local privacy laws due to the "lack of supporting evidence provided by the complaintant and the limited information or evidence that could be gathered."
Shi Tao, a former writer for the financial publication Contemporary Business News, was jailed under state secrecy laws for allegedly providing state secrets to foreigners, the AP reports.
His conviction stemmed from an e-mail he sent containing his notes on a government circular that spelled out restrictions on the media.
Hong Kong lawmaker Albert Ho said in March 2006 he submitted a complaint against Yahoo Hong Kong to the privacy commissioner after obtaining a document that he said linked the company to Shi's case.
The document, which Ho said was a copy of the criminal verdict for Shi from a court in the central Chinese province of Hunan, said, "Yahoo Holdings (Hong Kong) Ltd. provided materials that confirmed the user's information."