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Yahoo says US threatened $250,000-a-day fine

By
Kaja Whitehouse
Published Sep. 11, 2014, 10:04 p.m. ET

Uncle Sam once threatened Web portal Yahoo! with a whopping $250,000-a-day fine if it didn’t hand over info on customers’ confidential online communications, it was revealed Thursday.

The eye-popping threat came in May 2008 after Yahoo! balked at the request for the data from the NSA, which was looking to gain unprecedented access to international communications for its controversial PRISM program.

Yahoo! felt the request was unconstitutional, and fought it through the secretive Foreign Intelligence Surveillance Court.

The Sunnyvale, Calif., company lost the case, and the records remained sealed until Thursday, when a FISC judge approved a Yahoo! request to unseal the documents.

Word of the unsealing was made by Yahoo! general counsel Ron Bell in a post on the company’s Tumblr account.

“We consider this an important win for transparency, and hope that these records help promote informed discussion about the relationship between privacy, due process, and intelligence gathering,” Bell said in the posting.

In the end, most major tech companies — including Google, Facebook, Apple and Microsoft — complied with the NSA demand.

Yahoo! is planning to release “more than 1,500 pages of once-secret papers” related to its National Security Agency battle, Bell said in the post. The papers will be posted on Yahoo!’s Tumblr blog since the FISC court doesn’t have a public docket.

The NSA’s PRISM program is controversial because it allowed for warrantless surveillance of US citizens. Exiled NSA contractor Edward Snowden blew the cover off PRISM last year — resulting in a national backlash against the program and Snowden.

Yahoo! is widely believed to be the only company to challenge a PRISM request in the government’s secret court. It is also the only tech company known to have asked the FISC to make the documents in its fight public.

Microsoft was tapped to participate in PRISM as early as 2007, and Google in 2009, previously disclosed documents reveal.

Yahoo! never ended up having to pay the fine, which would have ended up costing it $1.75 million a week, a Yahoo! spokeswoman told The Post.

The government threatened the fine, which was for contempt, if Yahoo! refused to comply with the FISC ruling in May 2008, the spokeswoman said.

“I think this is a significant step in the right direction,” said Patrick Toomey, a staff attorney with the ACLU’s Security Project. “But there’s still a long way to go in terms of bringing greater transparency” to the nation’s spy tactics.

“The released documents underscore how we had to fight every step of the way to challenge the US Government’s surveillance efforts,” Bell said in his Tumblr post.

Portions of the documents slated for release remain redacted, Bell said. Indeed, the FISC’s three-page ruling Thursday — one of the few documents the secret court has made public — said the court is still deciding on Yahoo!’s request to declassify the transcript of the oral arguments made before the court about the data request.