The US government threatened to fine Yahoo $250,000 a day in 2008 if it failed to turn over customer data to intelligence agencies.
New documents show that a filing to the secretive US Foreign Intelligence Surveillance Court, which rules on government requests to conduct surveillance for national security issues, by US government asked that Yahoo be made to pay a minimum fine of $250,000 for each day it refused to comply with a court order to turn over user data, with the fine to double each successive week.
Yahoo said it plans to make public some 1,500 previously classified pages documenting a lengthy tussle with the government, which it ultimately lost and which experts say helped pave the way for the Prism surveillance program revealed last summer by former National Security Agency contractor Edward Snowden.
"It's always been a little bit behind the curtain as to what Internet companies do when they actually receive these requests. Now we have evidence that Yahoo did in fact fight this battle and look at considerable fines as a consequence of not disclosing the data," said Marc Rotenberg, executive director of the Electronic Privacy Information Center.
"It tells us how very serious the Bush administration was about trying to get the Internet firms to turn over this data. Until the disclosure, it was mostly hearsay that they were willing to impose these penalties."
US Internet companies are keen to lift the lid on the procedures of the Foreign Intelligence Surveillance Court, whose members are appointed by the US Supreme Court chief justice. The court has never held a public session and generally hears only from the US Justice Department and intelligence agency lawyers.
Facebook, Microsoft, Yahoo and Google began publishing details about the number of secret government requests for data earlier this year, with the aim of showing their limited lack of control over the controversial US surveillance efforts.
"Despite the declassification and release, portions of the documents remain sealed and classified to this day, unknown even to our team," Yahoo General Counsel Ron Bell said in a blog post on Yahoo's website.
Privacy advocates said the release of the Yahoo documents, even in their heavily redacted form, provided important information about the controversial surveillance practices.
"It fills in more gaps than what we knew about the challenge," Mark Rumold, a staff attorney with the Electronic Frontier Foundation.
"The bottom line is these are federal court opinions and they are interpreting federal law in the constitution in really significant and substantial ways and they're being withheld from the public.”