Yahoo reveals threat of US$250,000 daily fines over internet data

Yahoo said the US government threatened to fine the company US$250,000 a day if it did not comply with demands to surrender online information, a step the company regarded as unconstitutional.

The outlines of Yahoo's secret and ultimately unsuccessful court fight against government surveillance emerged on Thursday when a federal judge ordered the release of some material about Yahoo's court challenge.

In a statement, Yahoo said the government amended a law to allow it to demand user information from online services, prompting a challenge in 2007 during the George W Bush administration.

"Our challenge, and a later appeal in the case, did not succeed," Yahoo lawyer Ron Bell said.

The new material about the case underscored "how we had to fight every step of the way to challenge the US government's surveillance efforts," Bell said.

"At one point, the US government threatened the imposition of US$250,000 in fines per day if we refused to comply."

Bell said the Foreign Intelligence Surveillance Court upheld legislation which gave the government access to online communications by users of Yahoo.