09/11/2014 07:09 EDT | Updated 09/11/2014 07:59 EDT

Yahoo Says U.S. Threatened $250,000-A-Day Fine If It Didn't Hand Over User Data

Justin Sullivan via Getty Images
SUNNYVALE, CA - MAY 23: A sign is posted in front of the Yahoo! headquarters on May 23, 2014 in Sunnyvale, California. (Photo by Justin Sullivan/Getty Images)

WASHINGTON -- Yahoo said Thursday the government threatened to fine the company $250,000 a day if it did not comply with demands to go along with an expansion of U.S. surveillance by surrendering online information, a step the company regarded as unconstitutional.

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.

In a statement, Yahoo said the government amended a law to demand user information from online services, prompting a challenge in 2007. Former National Security Agency contractor Edward Snowden disclosed the program last year.

"Our challenge, and a later appeal in the case, did not succeed,'' Yahoo general counsel Ron Bell said in a statement.

The new material about the case, first reported by The Washington Post, underscores "how we had to fight every step of the way to challenge the U.S. government's surveillance efforts,'' Bell added. "At one point, the U.S. government threatened the imposition of $250,000 in fines per day if we refused to comply.''

Bell said the Foreign Intelligence Surveillance Court upheld the predecessor to Section 702 of the FISA Amendments Act. Section 702 refers to the program called PRISM, which gave the government access to online communications by users of Yahoo.

The company said it is committed to protecting users' data and that it will continue to contest requests and laws that it considers unlawful, unclear or overly broad.

"We consider this an important win for transparency, and hope that these records help promote informed discussion about the relationship between privacy, due process and intelligence gathering,'' said Bell.

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