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Yahoo says US government threatened $250,000-a-day fines to get user data

The company obtained the release of 1,500 pages of classified documents, part of the secret proceedings of the US Foreign Intelligence Surveillance Court, detailing its failed challenge of the government's warrantless surveillance program.

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Yahoo!, whose Sunnyvale, Calif. headquarters are shown here in this 2012 photo, says the government threatened to fine the company $250,000 a day if it did not comply with demands to go along with an expansion of U.S. surveillance laws by surrendering online information, a step the company regarded as unconstitutional.

Marcio Jose Sanchez/AP/File

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Internet giant Yahoo, whose website portal is the fourth-most trafficked site on the planet, said it fought the US government’s sweeping domestic surveillance programs “every step of the way” seven years ago as American intelligence officials began to demand access to users’ private data without traditional warrants.

On the 13th anniversary of 9/11, Yahoo announced it would release nearly 1,500 pages of previously secret documents that described the company’s failed constitutional challenge to the provisions in the Protect America Act, signed into law six years after the Sept. 11, 2001, attacks, which allowed the government to collect information originating overseas.

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Among the revelations: Yahoo said that the US government threatened to fine the company $250,000 a day if it did not comply with its demands for data.

The company fought for the release of the classified documents, part of the secret proceedings of the US Foreign Intelligence Surveillance Court, also known as the FISA court, which rejected Yahoo’s contention that the government surveillance program, conducted without probable-cause warrants, was overbroad and unreasonable and violated the Fourth Amendment.  

“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,” wrote Ron Bell, Yahoo’s general counsel, in a blog post Thursday.

The documents were unsealed by the FISA court at the company’s request, he wrote.

Tensions in the relationship between personal privacy and the needs of national security have become one of the most vexing conundrums of the digital age, many social thinkers say.

But the full scope of the issues of government power and transparency in free society only came to light last year with the revelations of Edward Snowden, the former National Security Agency analyst who leaked thousands of classified government documents, shocking the nation with the wide range and technical precision of the government’s domestic spying programs.

“The balance between liberty and security has always been a delicate on in our nation’s history, and it goes back to the very founding,” says Aram Sinnreich, a digital privacy expert at Rutgers University’s School of Communication and Information in New Bruswick, N.J. “But what’s really changed now is that the scope of information that can be collected, and the amount of intelligence that can be pulled out of it, has skyrocketed as we have increasingly relied on networked communications to conduct our daily affairs.”

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The FISA court ruling against Yahoo became a critical moment in the government’s electronic surveillance efforts, forcing other major US tech companies, including Google, Facebook, and Apple, to comply with unprecedented demands for user data.

The ruling, too, came as the government implemented the newer PRISM surveillance program, which could scan almost all of the country’s electronic data – including e-mails, voice chats, and social media information – and search for tell-tale keywords or other signals of potential security threats.

“The temptation, I think, for the American government to err on the side of caution is very sincere,” says Professor Sinnreich. “Left or right, popular or unpopular, no politician wants to preside over a major terrorist attack on our own soil, and they’re going to do whatever they believe it takes to make sure it doesn’t happen.”

Yahoo’s announcement of its efforts to resist what it views as the government’s overreach, however, was especially suggestive on the anniversary of 9/11, some observers say.

“The secrecy that surrounds these court proceedings prevents the public from understanding our surveillance laws,” said Patrick Toomey, staff attorney with the American Civil Liberties Union, in a statement Thursday. “Yahoo should be lauded for standing up to sweeping government demands for its customers' private data.

“But today’s release [of documents] only underscores the need for basic structural reforms to bring transparency to the NSA’s surveillance activities,” Mr. Toomey said.

Mr. Bell, Yahoo’s attorney, said the company would soon provide online links for the some 1,500 pages of formerly classified documents, which could once again rekindle the ongoing debate over privacy and security.

“I think there’s a national conversation that needs to continue in the wake of whistleblowers like ... Edward Snowden,” says Sinnreich. “It’s a national conversation about what we want our values to be in a networked world, and I think that’s a very good thing.” 

“The onus on us to make sure that security is adequately counterbalanced by liberty in that grand equation is greater than it’s ever been,” he says.