Yahoo was threatened with a daily $250,000 fine for protecting user data

The U.S. government threatened to fine Yahoo $250,000 a day in 2008 if it failed to comply with a broad demand to hand over user communications — a request the company believed was unconstitutional — according to court documents unsealed Thursday that illuminate how federal officials forced American tech companies to participate in the National Security Agency’s controversial PRISM program. The documents, roughly 1,500 pages worth, outline a secret and ultimately unsuccessful legal battle by Yahoo to resist the government’s demands. The company’s loss required Yahoo to become one of the first to begin providing information to PRISM, a program that gave the NSA extensive access to records of online com­munications by users of Yahoo and other U.S.-based technology firms. The ruling by the Foreign Intelligence Surveillance Court of Review became a key moment in the development of PRISM, helping government officials to convince other Silicon Valley companies that unprecedented data demands had been tested in the courts and found constitutionally sound. Eventually, most major U.S. tech companies, including Google, Facebook, Apple and AOL, complied. Microsoft had joined earlier, before the ruling, NSA documents have shown.