US threatened Yahoo with huge fine over emails

WASHINGTON (AP) — Yahoo's free email service could have cost the company an extra quarter of a million dollars a day.

The government called for the huge fine in 2008 if Yahoo didn't go along with an expansion of U.S. surveillance by surrendering online information, a step the company regarded as unconstitutional. At stake, according to the government, was the nation's security.

"International terrorists, and [redacted] in particular, use Yahoo to communicate over the Internet," the director of national intelligence at the time, Mike McConnell, said in a court document supporting the government's position. "Any further delay in Yahoo's compliance could cause great harm to the United States, as vital foreign intelligence information contained in communications to which only Yahoo has access, will go uncollected."

The outlines of Yahoo's secret and ultimately unsuccessful court fight against government surveillance emerged when a federal judge ordered the unsealing of some material about Yahoo's court challenge. Sections of some of the documents were redacted, such as the names of the terrorists McConnell cited.

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