China, human rights,
and the entangled Net By Brian Wingfield
WASHINGTON - Microsoft, Google, Yahoo and
Cisco Systems withstood blistering criticism on
Wednesday from a US congressional panel that
accused the firms of engaging in unethical
business practices by being complicit in the
persecution of free-speech advocates in China.
From both sides of the US political
spectrum, members of a House subcommittee that
oversees global human rights
reprimanded representatives
from the four high-tech firms, charging them with
fostering censorship in China and not doing enough
to help the victims of Beijing's crackdown on
dissent.
At the same time, the hearing
revealed the companies' very different business
models in China, and members of Congress urged the
firms to support forthcoming legislation that aims
to make it illegal for Internet firms to comply
with the laws of repressive regimes.
"We
must stand with the oppressed and not with the
oppressors," said Congressman Chris Smith, a New
Jersey Republican who is the subcommittee's
chairman and the sponsor of the bill, to be known
as the Global Online Freedom Act.
The
issue, of course, is how US firms should tap into
the world's fastest-growing technology market.
China already has about 110 million Internet
users, and analysts estimate that by 2010, this
number will skyrocket to 250 million. Naturally,
US companies want a piece of this pie. The problem
is that China monitors its citizens' Internet
activity, blocks information from websites, and
frequently jails those who it believes engage in
subversive cyber-activities.
US
corporations have responded that to do business in
China, they must comply with Chinese laws,
regardless of whether they agree with them. In
addition, they say, providing Chinese citizens
with some information is better than not supplying
information at all. Moreover, if US high-tech
companies backed out of China, Chinese competitors
would take their place.
How this issue is
resolved will depend heavily on how the companies,
Congress and the US administration collaborate in
dealing with China. And if Wednesday's hearing was
a first step in this collaboration, its primary
outcome was to show that the Internet companies
aren't even on the same page in their own
operations.
For example, last October,
Yahoo China merged with Alibaba.com, a Chinese
company. Yahoo holds one of four board seats at
Alibaba.com, allowing the US search engine to cede
its day-to-day operations to its Chinese
counterpart. This distinction enabled Michael
Callahan, Yahoo's senior vice president and
general counsel, frequently to sidestep the
subcommittee's inquiries into Yahoo's practices in
China.
Google has in essence two
operations in China - its regular website,
Google.com, which is accessible across the globe,
and a Chinese-language service, Google.cn, which
complies with Chinese censorship laws. According
to the testimony of Elliot Schrage, Google's vice
president for global communications and public
affairs, the company introduced Google.cn after it
discovered in 2002 that Google.com was running
slowly in China, probably because of monitoring
efforts by the Chinese government. Unlike Yahoo or
Microsoft, Google has never hosted its e-mail and
blogging tools in China, a decision specifically
undertaken to keep personal information out of the
government's hands.
Jack Krumholtz,
Microsoft's associate general counsel and managing
director of federal government affairs, suggested
in his remarks on Wednesday that his company takes
a more involved approach in China than either
Yahoo or Google. Last May, Microsoft introduced a
blogging service in China, which has become the
country's No 1 such service. He also acknowledged
that China's regulations restricting Internet use
"encompass the kinds of Internet-based services
provided by Microsoft's MSN division". In fact,
last year MSN shut down a popular blog under
orders from the Chinese government.
Unlike
the search-engine firms, Cisco Systems provides
the routers and switches - sometimes called "the
plumbing" - for Internet services. Mark Chandler,
the company's senior vice president and general
counsel, said in his prepared remarks that "Cisco
does not customize or develop specialized or
unique filtering capabilities in order to enable
different regimes to block access to information".
He added that the company "sells the same
equipment in China as it sells worldwide".
Comments such as these were
eventually used to the companies' own detriment.
Subcommittee members criticized Yahoo in particular for handing over e-mail
records that resulted in the jailing of
Shi Tao, a Chinese journalist. (Callahan, Yahoo's
lawyer, said the company doesn't even have the
ability to determine how or to what
extent the Chinese government monitors its e-mail.) As
for Cisco, Smith, in a recent press release, accused the
router firm of providing the Chinese government
with the technology necessary to filter Internet content
through its creation of Policenet, a government web-filtering
tool.
Initially, Google seemed to
defy Chinese authority somewhat by refusing to
host e-mail and blogging services in China.
However, Smith pointed out that Google's two
services in China produce completely different
results for such terms as "Tiananmen Square":
Google.cn's results show pleasant, touristy images
of the square in Beijing, while Google.com's
results mainly reference the anti-government
uprising that took place there in 1989.
This led Congressman James Leach, a
Republican from Iowa, to accuse Google of "worst
practices" by actually creating tools for
censorship. "This makes you a functionary of the
Chinese government," he said. "If this Congress
wanted to learn how to censor, we'd go to you."
But perhaps the most pointed criticism of
the day came from Congressman Tom Lantos, a
Democrat from California. "Your abhorrent
activities in China are a disgrace," he said. "I
simply do not understand how your corporate
leadership sleeps at night."
Later, he
demanded from each company's representative a
response to the following: "Are you proud or
ashamed of your practice" in China? No one gave a
straight answer. He then asked whether any of
these companies had offered assistance to the
families those being persecuted for their Internet
use in China. None had.
Only Congressman
Adam Smith, a Democrat from Washington state
(where Microsoft is a major employer), said his
colleagues were misguided in blaming the tech
firms for enabling repression.
"Lashing
out at the companies for enabling this is sort of
absurd," he said, noting that Chinese citizens are
better off with some involvement from America's
high-tech companies rather than none at all.
Alienating China over this issue, he said, would
be a "very grave mistake".
To be sure,
Microsoft, Google, Cisco and Yahoo find themselves
in a classic capitalist's dilemma - they naturally
want to maximize profits, but they find that in
this case, this goal contradicts a sense of ethics
that they strive to uphold. And they say they are
being subjected to rules beyond their control,
without the leverage that would allow them to
change these rules.
All of the "big four"
obviously agree on supporting freedom of speech
and transparency in an age of information. They
also agree that they are bound by the laws of the
countries in which they operate, and argue that
without the help of the US government (such as
making anti-censorship regulations a part of trade
negotiations), they will continue to be subject to
whatever laws are imposed on them.
But
they also all agree that the benefits of doing
business in China far outweigh the costs.
According to Microsoft's Krumholtz, "one recent
independent survey of Chinese Internet users found
that 48% of Internet users believe that by going
online, the Chinese will learn more about
politics, and 60% of users believe the Internet
will provide more opportunities for criticizing
the government".
Wednesday's hearing was
the US government's first hard look at the way in
which US tech firms do business in China. At the
moment, none of these companies are taking steps
to change their practices, and certainly, none of
them are even considering pulling out of the
world's fastest-growing market.
The next
step will likely be legal in nature, as a draft of
Chris Smith's Internet-freedom bill is already in
the works. In this draft form, the bill already
contains language "to prohibit any United States
business from cooperating with officials of
Internet-restricting countries in effecting the
political censorship of online content". It also
prohibits US business from locating search engines
within the borders of oppressive regimes.
It will be up to companies such as Cisco,
Microsoft, Google and Yahoo to work with Congress
to determine to what extent their activities in
China should be regulated - and these companies'
lobbyists are among the very best.
What is
likely to happen going forward? First, look for
the issue to gain steam publicly - both the rise
of China and the ability of governments to censor
and monitor the public's activity are now
prominent issues on the minds of the US public.
Second, expect the United States to take the issue
to the Organization for Economic Cooperation and
Development and the World Trade Organization.
Internet censorship is a global concern, not just
something that affects China and the US. That
said, also look for any US legislation to mention
Internet restrictions in other countries, notably
Iran, Cuba, Vietnam, Myanmar and Saudi Arabia. And
look for this issue to be a bargaining chip in any
trade relations with such countries.
In
all likelihood, US Internet companies doing
business in China will have to establish an
across-the-board policy to deal with Chinese laws.
They might have to move their blogging and e-mail
hosting capabilities offshore, as Google now does.
But don't expect them to leave China entirely any
time soon - the stakes are too high for them to
walk away (or even be forced away) from such a
promising market.
Brian
Wingfield is a freelance reporter based in
Washington, DC.
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