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.”
