Yahoo has been accused of spying on users by scanning millions of email accounts secretly for the US government, sources say.
According to Reuters, Yahoo built a custom software programme to search incoming emails for specific information.
A pair of former Yahoo employees claim that this was requested by either the National Security Agency or the FBI.
US law allows the country's intelligence agencies to order the release of customer data that they believe could prevent a terrorist attack, among other reasons.
Companies can challenge such orders behind closed doors in the Foreign Intelligence Surveillance Court.
The report from Reuters adds that it is unknown just what user information Yahoo handed over.
Experts say that the case is the first of a US internet company agreeing to search all incoming messages for a spy agency.
A statement provided by the tech giant read: “Yahoo is a law abiding company, and complies with the laws of the United States.”
Last month, a group of hackers stole personal details from around 8 million UK Yahoo accounts.
