U.S. threatened Yahoo with $250,000-per-day fine for withholding user data

Yahoo! Inc. said the U.S. government threatened in 2008 to fine it $250,000 a day for refusing to comply with national security-related requests for its users’ Internet data.

In small victory for Yahoo’s legal challenges to U.S. surveillance practices, a court today permitted the company to release 1,500 pages of documents that shed light on the scope and force of the government’s data-collection methods.

The company and competitors including Google Inc. and Facebook Inc. have been trying to protect their reputations following revelations that began in June 2013 by former government contractor Edward Snowden that the National Security Agency had access to information about the Internet use of the companies’ customers. Yahoo first challenged the NSA requests in court in 2007-2008.

“The released documents underscore how we had to fight every step of the way to challenge the U.S. government’s surveillance efforts,” Ron Bell, general counsel for the Sunnyvale, California-based company, said in a blog posting.

The case stemmed from amendments to Section 702 of the Foreign Intelligence Surveillance Act to let the government demand user information from online services.

Yahoo was the only company that refused to comply and fought the requests. The 2007-2008 challenge and an appeal failed and the court ordered the company to give the government the data it was seeking. The company complied and did not pay the $250,000-a-day fine.

The U.S. Foreign Intelligence Surveillance Court, the secret court that oversee government surveillance requests, decided to declassify the documents, Yahoo said.

“We refused to comply with what we viewed as unconstitutional and over-broad surveillance and challenged the U.S. government’s authority,” Bell said.

Portions of the documents remain sealed and classified.