Yahoo was threatened with $250 million fines if it did not hand over data Reuters

Yahoo was threatened with a fine of $250,000 a day by the US government if the search engine giant did not cooperate with data collection operations, according to newly released documents.

The documents give a glimpse as to how US intelligence coerced tech companies into participating with the NSA's wide-reaching PRISM program.

Yahoo challenged the constitutional grounds of the NSA's request in a secret, and ultimately fruitless legal process detailed in 1,500 documents, pored over by reporters at the Washington Post.

Its failed fight against the US government's vast data collection operation saw Yahoo become one of first major tech companies to grant access to the now-defunct PRISM initiative. Facebook, Google and practically the entirety of the industry were eventually roped in.

"The released documents underscore how we had to fight every step of the way to challenge the US Government's surveillance efforts, Ron Bell, Yahoo's General Council, wrote on Tumblr.

Federal Judge William C. Bryson, judge of the Foreign Intelligence Surveillance Court of Review, ordered that the documents from the Yahoo-Government legal battle be unsealed - the first step in a move from the US legal system to make public the goings-on behind the NSA's controversial operations, and interroage the legal foundation for PRISM.

According to the documents, the government's first demand for data came in 2007. Yahoo was stunned by the extent of the data requested, and were suspicious of the unusual requirements of the requests. All data on people outside of the US was requested, including that of US citizens abroad.

Yahoo failed in its attempts to appeal at the Foreign Intelligence Court of Review, and in its claims that the request was unconstitutional that were heard at the Foreign Intelligence Surveillance Court.

The conclusions of these court cases were held by the government and used as a means of pressuring the other major US tech companies like Apple into cooperating.

The requests referred to "metadata" that indicates the where and the when of internet interaction, rather than the actual content.

"The public can't understand what a law means if it doesn't know how the courts are interpreting that law," said Patrick Toomey, staff attorney with the ACLU's national security project.

The ACLU supported Yahoo's attempts to resist the government's data demands.