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Li Zhi was handed an eight-year prison sentence for "inciting subversion" after criticizing local officials online, the group said.
"We are looking into the report," said Yahoo spokesperson Mary Osako. "We would not know the nature of an investigation," she added, countering the Reporters Without Borders claim.
But the journalist advocacy group begged to differ. "Yahoo certainly knew it was helping to arrest political dissidents and journalists, not just ordinary criminals," the group said in a statement.
The accusation follows earlier criticism that Yahoo provided information used by China to convict a reporter for revealing state secrets.
Yahoo was criticized in 2005 after it became known the company revealed information that the Chinese government used to convict reporter Shi Tao of revealing state secrets.
Yahoo, Google and Microsoft have been criticized for cooperating with China's attempts to criticize protesters.