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Feds Threatened to Fine Yahoo $250K Daily for Not Complying with NSA's PRISM
- dmritard96 12y agomight be worth it actually. if it doesn't increase, and if they can market with it. haha
- joshavant 12y agoWeren't these requests, which Yahoo objected to, intended to stay secret, by the wishes of the government? Consider if Yahoo refused to honor the requests, and began accruing the fines. Presumably, if they didn't pay the huge bill for their fines, what would happen? Surely, $250k/day would rack up fast... As I see it, eventually Yahoo would rack up such a bill that they couldn't afford it, and any collection of the fee by the government would force Yahoo to close its doors. At that point, surely they'd have to reveal something to the general public about said requests, and the fines, and everything else going on behind the scenes...
- melvinmt 12y ago"As I see it, eventually Yahoo would rack up such a bill that they couldn't afford it, and any collection of the fee by the government would force Yahoo to close its doors." Yahoo is about to get $20bn+ in cash in about 2 weeks, so they can hold out these fines for about 80,000 days.
- joshavant 12y agoFair enough. But it still stands, couldn't Yahoo ignore it? What's the worst thing the government could do to Yahoo that would go unnoticed by the public, if Yahoo didn't comply?
- AVTizzle 12y agoThat's an expensive gamble, with probable jail time somewhere in there for the responsible execs.
- joshavant 12y agoI find it very hard to believe any government agency could take Marissa Mayer or anyone on the board off to jail with no reason and not cause a huge stir...
- plorkyeran 12y agoI find it very easy to believe that the NSA could find a crime which Marissa Mayer (or anyone else) is guilty of and carries jail time as a punishment.
- idlewords 12y agoIf you want to break out the black helicopters, note that it would have to be the FBI that did this.
- dredmorbius 12y agoNo. The NSA would find the crime and communicate it to the FBI. But if your point is that the NSA have no law enforcement role, that's salient. Also: check your mail WRT http://idlewords.com/bt14.htm http://idlewords.com/bt14.htm I've posted a few fixes to that (excellent piece BTW) from my gmail account.
- idlewords 12y agoI will never check my email. Mwahahahaha!
- dredmorbius 12y agohttp://i.imgur.com/NgmuHGn.jpg http://i.imgur.com/NgmuHGn.jpg
- tjohns 12y agoIf Yahoo continued to resist, I'm sure the government would just gradually increase the amount until they had no choice but to comply. These kinds of fines are usually issued for contempt of court. Judges don't take kindly to parties that try to ignore a court order, which would include writing off a court imposed fine as a cost of business. There's few things more terrifying than an angry judge with full power of contempt. There's no principle of proportionality, which gives judges almost unlimited authority. See Chadwick v Janecka (3rd Cir. 2002) as an example.
- randomfool 12y agoBut Yahoo is a public company and the ones they are punishing is the shareholders. At what point does the government need to tell shareholders that they are siphoning cash?
- benologist 12y agoI was thinking about that because it seemed like a cost they could just afford to ignore ($91m/yr), this was probably not the limit of the penalties they could have faced.
- ams6110 12y agoAt some point people would have started being thrown in jail and that's when resistance usually ends.
- skue 12y agoRight, but what would that look like? Would the FISA court jail a citizen without a trial, and can you imagine a FISA judge wanting to make that call, knowing that their decision will soon become public? Because once someone is prosecuted the U.S. govt would really have difficulty enforcing silence. It's one thing to force a company to be silent about surveillance, it's quite another to force individuals to be silent about being jailed. I'd like to think we haven't gone so far off the tracks that the first amendment wouldn't ultimately triumph in that case.
- deciplex 12y agoIt's called 'disappeared' and we're close.
- idlewords 12y agoWatch what you say. Final warning.
- dijit 12y agoit's not so cut and dry, first they discredit you. then they say you did something illegal and you're immoral. then you appear like you're lashing out at a government- trying to blame them instead of atoning for past transgressions.
- amirmc 12y ago
- monsterix 12y agoI have a question: Can the NSA/the coercing party be reverse fined at $500k/day by Yahoo (i.e by an organization) for some reasons in similar vein?
- otakucode 12y agoProbably... but in order to bring any lawsuit against the US government (presuming they don't pay... which they wouldn't), the US government has to grant you permission to sue them. So chances are that debt would go nowhere.
- baddox 12y ago> Presumably, if they didn't pay the huge bill for their fines, what would happen? It's easy to think of shady secret things the government could do to coerce Yahoo! in to either complying or paying. But at the end of the day, there's always people with guns.
- nitrogen 12y agoBut at the end of the day, there's always people with guns. I think the point of the OP is that "people with guns" get to be pretty hard to hide at larger scales.
- otakucode 12y agoLuckily companies keep the number of people with actual decision-making power to a very, very small group. Only threatening 1 or 2 people would probably be necessary.
- baddox 12y agoIf the other methods failed, why try to hide the guns? Just spin it as though it's in the interest of the public. Governments do that all the time.
- lern_too_spel 12y agoOver the course of a year, that's equivalent to employing 300 engineers. For a company the size of Yahoo, that would be pretty easy to hide.
- dredmorbius 12y agoThat's an interesting comparison, but it's still a pretty big hit. Profits (net income) over the past four quarters were $311 million, the fines would have eaten nearly a third of that, $91.25 million. For 2008 the percentage may well have been higher.
- lern_too_spel 12y agoFor internet companies, profits are nearly meaningless. Profits are just a financial game these companies play with Wall Street, moving investments from one quarter or year to another by playing around with amortization and other financial tricks to hit EPS targets, a metric that only makes sense for Coca-Colas and GEs. Revenue is what matters, and the $7.2 billion in revenue Yahoo generated in 2008 leaves plenty of room to hide $90 million over four quarterly earnings reports.
- dredmorbius 12y agoWhile financial games are a significant issue, I wouldn't discount profit entirely. Looking at the components of cost-of-revenues will give you some idea of how easy that money is. It's actually a fairly interesting point on reflection. I look at it as metabolic efficiency. Note that YHOO's profit margins are fairly high as well.
- lern_too_spel 12y agoI would discount profit entirely, especially if you are in a growing market. Focusing on profit will make you lose out to other companies that are focusing on growth. In a few years, that other company is going to be dominant in that market and will be able to turn on the profit faucet to help them apply the same idea to another market. Bezos and Schmidt, in particular, have spoken publicly about this business strategy several times. It is the reason companies like Amazon and Netflix can report negative earnings but maintain sky-high valuations.
- xtrasmart 12y agothey would just withdraw the money appropriate the company sell it off and install their security amongst employees. i think I have seen it somewhere, hightway interdiction. I am sure that they have a way to do whatever they want. nevermind bombing contries that refuse to give up controls to energy resources or are controlling flow of those. like um Syria or Ukraine.
- Shivetya 12y agoit would not be long before they would find a way to put the executives in jail. I do not doubt for one minute they would use other government agencies to intimidate, the IRS chief amongst them. Not much will change until the people in Washington are changed and changed regularly. the system is engineered to protect those in office and they are very good at manipulating the public into helping them maintain that dominance; namely bills to supposedly prevent money in politics - except it really only blocks money for views that don't support their views.
- xtrasmart 12y agoNATO should be destroyed with furious anger and righteous punishment.
- nathancahill 12y agoHappened in 2008, revealed today.
- darkstar999 12y agoYep, we can read the first sentence of the article too!
- AJ007 12y agoImagine what kind of secret programs are being pushed today that we will hear about in 2020, or longer. I have some guesses but they are so absurd I would be laughed off hn.
- crusso 12y agoYet we keep electing the same politicians that went along with all this. We deserve the tyranny.
- adventured 12y agoSo many people I talk to think the expanding tyranny primarily comes from politicians or bankers or corporations (the blame targets). When it actually comes from their fellow citizens, effectively voting away rights election after election for decades.
- sfjailbird 12y agoThe problem is that the system from the beginning was rigged against major change with the two-party system and the way state vs. federal authority is set up. Most of the rights that we pride ourselves on today were gained by citizen action (strikes, demonstrations) that were more often than not violently oppressed by the authorities, until the pressure threatened to undermine the stability of the system, in which case they threw some bones and progress was made. One could fear that the advanced state of surveillance, mass media brainwashing, and militarization of police forces has all but closed this avenue for change.
- jacquesm 12y agoSo that's the price of having principles.
- enlightenedfool 12y agoIn general people/entities with principles and morals have a higher price to pay. For them it's worth it.
- alsetmusic 12y ago> In general people/entities with principles and morals have a higher price to pay. For them it's worth it. Or the reality of a destroyed life leads them to suicide as the only way out. Prison is pretty terrible.
- yarou 12y agoThe surest way to remain poor is to be an honest man.
- xnull 12y agoThis is nothing compared to what allegedly happened to QWest. When the US Government was forcing telecom by telecom to install taps into their business's core routing hubs Joseph Nacchio, the CEO at the time, dug his heels in demanding legal avenues to avoid turning his back on QWest's customers. The US threatened to pull out large contracts that made up a large part of QWest's business. Furthermore, having been served a National Security Letter, Nacchio was not able to speak to his company or shareholders about the situation. Nacchio continued to insist on legal avenues and Uncle Sam did exactly what it threatened. Nacchio warned major stakeholders that all of the major QWest contracts were about to go belly up. The US government threw Nacchio in prison for insider trading. Oh and then QWest went bankrupt and was bought by competitor CenturyLink (who presumably had fewer difficulties complying). Sometimes the market has more than one invisible hand. Edit: A good point by a fellow commentor - no independent investigation has been performed into the QWest story. I looked but could not find FOIA information online.
- yuhong 12y agoI hasn't look it much recently, but I remember that the only sources for this claim was from Nacchio himself. I wonder what Snowden actually thinks of this claim.
- xnull 12y agoYes, this is a good caveat. This is what Nacchio claims. I do not have much in the way of a third party source. It's likely that Snowden doesn't know anything about it.
- swartkrans 12y agoWas he actually guilty of insider trading?
- xnull 12y agoI'm not a lawyer so nothing I say below means anything. From what I can tell - yes - he was guilty of insider trading by the letter of the law. Sharing insider information as CEO about the future of the company with shareholders is by definition insider trading. Despite circumstances, warning that contracts were being gutted is still illegal.
- hadoukenio 12y agoHere's a serious question - is the fine secret too? If Yahoo didn't comply and were slapped with a fine, could Yahoo object and table the fine in a court?
- IvyMike 12y agoThat would be an awesome item in the quarterly SEC filing: REDACTED $23M
- enlightenedfool 12y ago"But today’s [document] release only underscores the need for basic structural reforms to bring transparency to the NSA’s surveillance activities" and how would those reforms come when majority of population and hence politicians are okay with such surveillance? that's a dream. makes good hacker news debate and nothing beyond that.
- lern_too_spel 12y agoWhat sloppy reporting. "The company disputed the initial order in 2007 because it deemed the bulk demand for email metadata to be unconstitutionally broad." That is neither what the government demanded nor the reason Yahoo appealed. How did the reporter get this so wrong?
- otakucode 12y agoIt would have been very interesting if Yahoo had simply said "do it." A few months later the government would want to demand Yahoo pay them millions of dollars........ but be entirely incapable of explaining WHY they were owed this money at all. That would have been a very interesting event.
- tootie 12y agoYahoo would have to take $90M/year charge and either give a reason to the SEC or just declare it classified which would be as good as saying the NSA is taking it.
- tjohns 12y agoIt's unlikely this would stop at just $90M/year. There's no reason to believe the daily fine wouldn't continuously increase, or that executives wouldn't eventually be put in jail for contempt. And keep in mind you can be held in jail indefinitely for contempt of court, as long as you remain in noncompliance.
- adventured 12y agoNot to mention that if they really felt the need to break Yahoo, the Feds have a vast array of ways to do so. The fine is the most trivial approach in their arsenal. And if we wander into nefarious approaches, well, Yahoo was going to comply no matter what if the Feds felt like they needed it to happen for PRISM to be effective.
- tootie 12y agoAnd again, good luck sending a Yahoo exec to jail with no public explanation.
- duaneb 12y agoAt that point they're in contempt of court. There's really no saying how long it would have stayed $250k/day. A week? A month?
- comrade1 12y agoI wish there was a way to post anon here. I create a new id every now and then and post but no one sees the posting because it's new... I wish more people would be outraged by where the u.s. Is going and just leave. If you're educated, have desirable skills, you can just come to Europe. If you think you can change what's happening in the u.s. I do not agree with you. You will lose to the political class. They have 100% of their time to focus on restraining you while you have to focus on building your business. The u.s. has become a force for evil in the world. It has been at war for almost the entire time of its existence. In the past Americans were protected from that reality but now the u.s. seems to be even at war with its citizens and businesses. If you don't like what's happening in the u.s. you can quit your company you're building and become a politician, or you can just take your skills and knowledge to someplace different. But don't forget to continue filing your u.s. taxes.
- idlewords 12y agoSome of us are outraged by where the U.S. is going but stay to try to fix it. Otherwise you get adverse selection effects, like when all the non-crazies left New Hampshire. Plus have you ever had a European burrito? It's not pretty.
- rsync 12y agoWell, at least there is finally passable sushi being made in Zurich. That's a very, very new thing. All kidding aside - the euro countries are no better than the US in these areas. They have different code-names and the agencies are different, but they're all going the same direction.
- comrade1 12y agoYou're just plain wrong. Not about the sushi. Europe doesn't have the means nor the corporate-government cooperation that the u.s. has for spying. It happens in Europe, even Switzerland, but for good, not evil. For example, Switzerland reoprting to the Red Cross the CIA rendition flights that it learned through its satellite communications monitoring program. There's decent Mexican inn Basel. A Mexican and 1/2 Mexican Swiss have a restaurant.
- rdtsc 12y ago$250K/day -- someone had to come up with that number. Was it some high level official? An intern? I can imagine this dialogue taking place: ---- (Two bureaucrat monkeys. They just got back from lunch from cafeteria at Ft. Meade. Their tummies are bit heavy with greasy hamburgers. Settling in to finish their day before 2pm. One last thing needs to be done -- deciding on this PRISM non-compliance issue) M0: What if they don't comply? M1: We'll punish them! M0: How? M1: Well...we'll make them pay. M0: How much? M1: [Puts pinkie finger to the corner of his mouth] Two hundred and fifty thousand dollars a day! M0: Great idea, M1 (They wrap up before clock hits 2pm. Get in their cars. One goes to pick up kids from soccer practice. Other drives straight home, to his bachelor-pad apartment in College Park, MD). ---- Wonder what and how the people who generated and viewed this documents feel about them being on the front page of news sites. I can only hope they feel a tiny bit violated and betrayed. Kind of like when someone breaks in and steals your things. Or violates your privacy.
- AVTizzle 12y agoI was already loving your comment, and then you name-dropped College Park, MD my home for 4 years of undergraduate. But you make a good point. There was a real life human (or humans) on the creating end of that number. Do you think they believe they're actually fighting for American Freedoms and Security?
- ams6110 12y agoDo you think they believe they're actually fighting for American Freedoms and Security Yes, they probably do think that.
- deleted 12y ago[deleted]
- quarterwave 12y agoTony: Umm... Control? Control: Yes, Tony? Tony: If I may ask, how did you determine this sum of a 150,000 pounds a day? Control: A very good question, Tony. You see, I simply took the figure that our American cousins have calculated using a supercomputer, and converted the currency. Tony: That's very clever of you, Control. Control: Thank you, Tony. It proves that what we lack by way of resources we make up for with good old British ingenuity.
- notastartup 12y agoThis is like being shaken down by the Mafia. You are not gonna do what we like? It's gonna cost ya. Next we are gonna break Marissa's legs.
- idlewords 12y agoThat's how courts enforce court orders. You can get philosophical and say that the state is just like the mafia, man, except legal. But surely you understand the need for some mechanism to force compliance from people who just say "I don't want to do that" to a court ruling.
- biafra 12y agoYeah, but this is a secret court. Now way for the public to review it's decisions. No public accountability. That's IMHO what makes it Mafia like.
- andy_ppp 12y agoI actually believe that people should be allowed to do what they like, with the underlying premise that everyone has a right to not be harmed by another's actions. The law seems to have lost it's way to the point where if you are rich you win, poor you loose. And if you are the government or a business and you can't win, you change the rules so that you can.
- pkinsky 12y agoNote that this argument applies equally well to enforcing the edicts of England's Star Chamber.
- idlewords 12y agoYes. It has no moral content; it's the mechanism by which the state works.
- cryoshon 12y agoIt's a secret court, with secret penalties, none of which you're allowed to talk about if you're being attacked by it. Democracy does not coexist with expansive secret court systems...
- legutierr 12y agoHmm...if they hadn't complied, in three months more than $20 million would have accrued. Would that have been material enough to require disclosure in Yahoo's public filings? If so, how would it have been described? It seems as if by complying with SEC regulations, Yahoo would have been forced to violate secrecy rules with regards to the origin of the fine. That would have been an interesting conundrum.
- adventured 12y agoIt certainly would have been material within a short amount of time. One could debate exactly how many quarters that line is hit at, but at $45m to $90m it starts to become very stupid to hide from shareholders from a legal standpoint. Not reporting the exact details of a $90m acquisition is not a huge deal (for Yahoo). Not reporting on-going government fines that have amounted to $90m in a year, would be a huge deal. One is in theory the acquisition of value and enhances the business, the other is just a black hole of cash destruction. Further, beyond the money, intentionally doing something against the US Government such that you're getting fined per day, is a big issue for shareholders to know about. Especially given the power the government wields these days.
- idlewords 12y agoA smarter company would have treated the $250K as a marketing expense. It's peanuts compared to what Yahoo earns, and imagine the reaction when people figured out that Yahoo had gone to the mat for its users.
- alaaibrahim 12y agoyou understand that in order for this to be marketing it needs to be public information.
- idlewords 12y agoThat's what the multi-million dollar charge marked REDACTED on your quarterly earnings report is for.
- duaneb 12y ago> A smarter company would have treated the $250K as a marketing expense. That's called 'contempt of court' and would cause the fines to go up the second the judge realized how they took it.
- psykovsky 12y agoThey fought it, but they're complying...
- sharkweek 12y agoLet's just say hypothetically Yahoo said "No" and refused to pay the fines. What happens next? Do the feds forcibly shut down the company?
- korzun 12y agoIronically, half of HN is circle jerking DuckDuckGo as some sort of privacy king pin every other week. They are either in bed with NSA or will be very soon. I laugh how gullible some people are. "But they owner told me that they will stand up to US government with 3M seed round guys!"
- quackerhacker 12y agoJust seeing the dates that the companies complied (or were forced to comply) is disappointing. A full year after Steve Jobs passes and stepped down as CEO, then Apple is added to that list. Way to go Yahoo for sticking it our then.
- bengrunfeld 12y agoAnyone who believes that America champions freedom of speech and expression only has to go as far as the closest newspaper to discover that it's a bull-faced lie.
- dredmorbius 12y agoNB: usually given as "bald-faced lie".
- bengrunfeld 12y agoSince I am bald and respect my own hairlessness, I prefer the term "bull-faced lie", since I have much less respect for bulls. ;)
- kathrinalewis 12y agoThis is upsetting to this law abiding citizen!
- _pmf_ 12y ago> Feds Threatened to Fine Yahoo $250K Daily for Not Complying with NSA's PRISM Luckily, they realized that nothing of worth is on Yahoo.
- kriro 12y agoI applaud them for fighting this in some way but at the end of the day they'll probably comply somehow. The curious mind in me would like to see a parallel universe in which a major company responds to these threads by leaving the US entirely (or threatening to do so) and then running an anti agency here campaign for years to spite them. Or maybe a big enough company that takes them heads on and crushes them...well I guess I've been reading too much dystopia fiction recently and am curious how the megacorps > governments scenario would actually be kickstarted. [the situation is too sad for me to think about it in realistic terms, sorry for the minor derail]
- allegory 12y agoThe company I worked for a few years ago (I'm not going to disclose who as I'll get shot) were an EU based insurance org and had a US subsidiary that they used for selling overseas. They had a 5 man legal team to keep the US govt off their backs. In the end they said "fuck it" and closed US operations down one afternoon with no noticed, cancelled everyone's policies and fired everyone (gave them 4 months pay at the same time). Everyone was told why including the investors. Not a major company (<$50M capital) but it stirred the pot big time in a particular sector of the insurance industry and pissed off a number of large investors in the US.
- DominikR 12y agoA militarized police state, the state subjugating private businesses according to its needs, state intrusions into the most private spheres of its citizens, executions of US citizens without trial, kidnappings - it all looks like we are moving straight into fascism. And I'm seeing the same pattern in the EU where I live since it basically copies whatever the US does. "Fascist governments encouraged the pursuit of private profit and offered many benefits to large businesses, but they demanded in return that all economic activity should serve the national interest." http://en.wikipedia.org/wiki/Economics_of_fascism http://en.wikipedia.org/wiki/Economics_of_fascism
- jdimov 12y agoThe US and Israel now have what the Nazis could only dream about.
- DominikR 12y agoI do not like how Israel is always portrayed as some thug that is pulling the strings. Israel is a small satellite state of the US in a very important region, therefore Israel is very important to the US in realizing its goals to dominate this region. Also, the comparison with Nazi Germany is wrong. The US does not have any racial ideology, it wants to dominate economically and militarily, not destroy if it doesn't have to. A government that is fascist doesn't mean automatically that it has any policies towards certain races. It just means that it gradually removes freedoms of its citizens in every sphere to excert greater control over its population. The only reason that muslims are victimized on this scale is that mostly muslims live in that region. If the region was mostly habitated by a buddhist or jewish population that isn't compliant with US demands, then buddhists or jews would be the victims.
- yamayb 12y agoI don't think he means that Israel is pulling the strings -- but that is debatable (see AIPAC). I think what he is saying is that the fascist governments and capabilities of Israel and the U.S. would have been envied by Nazi germany. Maybe he has a point. Just consider the recent round of violence (to put it lightly, some might call it ethnic cleansing) in gaza. Now consider the success of dehumanizing the palestinians to the point where nobody in the world -- not even the arab nations took significant diplomatic action against Israeli aggression. Consider that in context of the scale of destruction of civilian infrastructure and the rate of civilian casualties. Huge propaganda success. All in this day and age of twitter/fb despite near total destruction of Gaza and overwhelming deaths of civilians. How many countries outside of south america recalled ambassadors? How much divestment? How many canceled contracts gas/weapons/settlement-products? Nothing significant enough to reverse Israeli actions. In the end, Israel only stopped because there was nothing left to destroy.
- chris_wot 12y agoYeah? I'd just refuse to pay, what are they going to do - publicize it?
- TeMPOraL 12y agoDig up that tax report 5 years ago you accidentally did wrong. Unofficially point the MAFIAA towards the fact that your kid pirated few songs and a movie last month. Or find something else entirely. You'll end up in jail or with no money for reasons (on the surface) completely unrelated to the case.
- jbverschoor 12y agoDear Yahoo, move to europe
- icantthinkofone 12y agoWhen the terrorists stop using the internet, the government will stop searching for them with PRISM. Sound fair?
- known 12y agoNever do anything against conscience even if the state demands it.