Thursday, September 11, 2014

U.S. Threatened Yahoo With Big Fines Over User Data
National Security Agency (NSA) headquarters in Fort Meade, MD.
Internet Firm Faced $250,000 a Day Fine If It Didn't Comply With NSA Request

By DANNY YADRON and DOUGLAS MACMILLAN CONNECT
Sept. 11, 2014 7:16 p.m. ET

A secret legal battle between the U.S. government and Yahoo Inc. over requests for customer data became so acrimonious in 2008 that Washington threatened to charge the Internet company $250,000 a day if it didn't comply.

Yahoo made the threat public Thursday after a special federal court unsealed 1,500 pages of legal documents from a once-classified court battle over the scope of National Security Agency surveillance programs.

The documents shed new light on tensions between American technology companies and the intelligence community long before former NSA contractor Edward Snowden began leaking in 2013.

The requests, and the long battle at the Foreign Intelligence Surveillance Court, were secret. Until last summer, Yahoo wasn't allowed to say that it had challenged government surveillance efforts—even without adding any other details.

"We refused to comply with what we viewed as unconstitutional and overbroad surveillance and challenged the U.S. Government's authority," Ron Bell, Yahoo's general counsel, said in a written statement. "Our challenge, and a later appeal in the case, did not succeed."

Mr. Bell's statement, in a post on Yahoo's Tumblr site, offered no details on the information the government had been seeking.

In a joint blog post, the Justice Department and the Office of the Director of National intelligence said the court found the government "has sufficient procedures in place to ensure that the Fourth Amendment rights of targeted U.S. persons are adequately protected" and that the requests were "reasonable."

In November 2007, the government began requesting "warrantless surveillance" of certain Yahoo customers, according to court records. Yahoo refused to comply until the following May after a FISC judge refused to stay the request and threatened Yahoo with the fine.

Write to Danny Yadron at danny.yadron@wsj.com and Douglas MacMillan at douglas.macmillan@wsj.com

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