Yahoo! chief Marissa Mayer's comments on Wednesday came after being asked what she is doing to protect Yahoo! users from "tyrannical government" during an on-stage interview at a TechCrunch Disrupt conference in San Francisco.
Mayer said Yahoo! scrutinises and fights US government data requests stamped with the authority of a Foreign Intelligence Surveillance Court, but when the company losses battles it must do as directed or risk being branded a traitor.
Data requests authorised by the court come with an order barring anyone at the company receiving the request from disclosing anything about them, even their existence.
"If you don't comply, it is treason," Mayer said when asked why she couldn't just spill details of requests by US spy agencies for information about Yahoo! users.
"We can't talk about it because it is classified," she continued.
"Releasing classified information is treason, and you are incarcerated. In terms of protecting our users, it makes more sense to work within the system."
Yahoo!, Google, Facebook, and Microsoft are among internet firms pushing for permission to disclose more details to users about demands for data made in the name of fighting terrorism or other threats.
Technology titans have been eager to bolster the trust of its users by making it clearer what has actually been demanded by and disclosed to US authorities.
US intelligence officials declassified documents on Tuesday revealing the National Security Agency violated privacy rules for three years when it sifted through phone records of Americans with no suspected links to terrorists.
The revelations raised fresh questions about the NSA's ability to manage the massive amount of data it collects and whether the US government is able to safeguard the privacy of its citizens.
The government was forced to disclose the documents by a judge's order after a Freedom of Information lawsuit filed by the Electronic Frontier Foundation, a non-profit group promoting digital privacy rights and free speech.
The foundation called the release of the documents a "victory" for transparency but intelligence officials said the papers illustrated how the spy service had made unintentional "mistakes" that were rectified under strict judicial oversight.
The release came after the scale of NSA spying was exposed in a series of bombshell media leaks in recent months by former US intelligence contractor Edward Snowden, who has been granted temporary asylum in Russia.
Documents divulged by Snowden have shown the NSA conducts a massive electronic dragnet, including trawling through phone records and online traffic, that has sometimes flouted privacy laws.
The declassified documents released on Tuesday shed light on friction between the NSA and the court, with judges castigating the agency for failing to abide by their orders and misrepresenting the nature of their data collection.
Zuckerberg blasts NSA
Meanwhile, Facebook founder Mark Zuckerberg blasted the US government's digital surveillance activities on Wednesday, saying it had failed to strike a correct balance between security and privacy issues.
"I think they did a bad job balancing those things here," Zuckerberg said at TechCrunch. "Frankly, I think the government blew it."
Zuckerberg criticised initial US claims that the digital spying was limited to foreign nationals.
"Wonderful, that's really helpful for companies trying to work with people around the world," he said.
"Thanks for going out there and being clear. I think that was really bad."
Zuckerberg's comments came two days after Facebook and Google petitioned the government's Foreign Intelligence Surveillance Court for permission to publish more information on the requests they receive from security agencies.
"We aren't psyched we had to sue," Zuckerberg said. "We just take this really seriously."
"The actions and statements of the US government have not adequately addressed the concerns of people around the world about whether their information is safe and secure with internet companies," Facebook general counsel Colin Streth said.
"We believe there is more information that the public deserves to know, and that would help foster an informed debate about whether government security programmes adequately balance privacy interests when attempting to keep the public safe. – AFP, Sapa-DPA