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The US Government Almost Bankrupt Yahoo in 2008

Yahoo

For an illuminating glimpse of government power in action, it’s hard to beat the fines the Justice Department threatened to level against Yahoo if it didn’t comply with a secret and sweeping surveillance request in 2008. News coverage of the case, for which documents were unsealed last week, reported the proposed fines as $250,000 a day. But there was also a clause that called for a doubling of the amount each week if Yahoo refused to comply. It was more than enough to bankrupt the company after just a few months. Yahoo’s longtime outside counsel, Marc Zwillinger, who was lead attorney in the unsuccessful fight against the government’s data demand, calculated the cost of resistance at more than $25 million after the first month and $400 million in the second month. “And practically speaking,” Zwillinger noted in a blog post published Monday afternoon, “coercive civil fines means that the government would seek increased fines, with no ceiling, until Yahoo complied.”

Read the full story at The Washington Post.

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More Stories By Shelly Palmer

Shelly Palmer is the host of Fox Television’s "Shelly Palmer Digital Living" television show about living and working in a digital world. He is Fox 5′s (WNYW-TV New York) Tech Expert and the host of United Stations Radio Network’s, MediaBytes, a daily syndicated radio report that features insightful commentary and a unique insiders take on the biggest stories in technology, media, and entertainment.