Yahoo!`s Stand on Free Speech in China

What do you do when your principles and your options don’t match? Yahoo! and the other major search engines are in that situation when they try to do business in China. Read about what brought Yahoo! to this state, and what it is trying to do about it.

For any American businessman who takes the values of his home country to heart, it must be a nightmare come to life. When the business itself can be seen as reflecting the highest of those values, accusations of betrayal—and worse—quickly follow. Yet it is exactly these waters that the major search engines must steer through every day, and in this case, that Yahoo! finds itself mired in concerning China.

To be sure, Yahoo! isn’t alone. Google took a lot of heat recently for finally caving in and agreeing to comply with China’s laws by censoring the search results of its China website. To be fair, it was the last major search engine to do so. But Google hasn’t yet had to deal with the mass of anger in the United States surrounding political arrests of Internet users in China that stemmed from the company simply obeying the law. Yahoo! has, and it hasn’t been pretty.

For those who haven’t heard, Yahoo! China in Beijing was required to provide information about a user. This user turned out to be Shi Tao, who was subsequently sentenced to 10 years in prison. His crime was “divulging state secrets abroad.” According to Reporters Without Borders, Shi Tao had sent “foreign-based websites the text of an internal message which the authorities had sent to his newspaper warning journalists of the dangers of social destabilization and risks resulting from the return of certain dissidents on the 15th anniversary of the Tiananmen Square massacre.”

This is information the Chinese government considered top secret—or at least, that’s what it claims. Shi Tao disputed that claim. You’d think that a government sending someone top secret information would at least label it as such so that there could be no disagreement over this point! Instead of China taking all of the heat for this, though, Yahoo! is taking a lot of it, as if its compliance with the law in China was some kind of appeasement policy. Those who maintain that point of view don’t have a good grasp of Yahoo!’s options, which are more limited than you might think. To understand this, it helps to look back in time a few years.

You might remember that, some years ago, anti-Nazi activists sued Yahoo! because French web surfers could buy Nazi-related items on Yahoo!’s website. This violates the anti-Nazi laws which every French citizen is supposed to follow. Yahoo! initially reacted with disbelief. It’s an American company; the Internet has no borders; surely they could not be bound by French law! Heather Killen, then Yahoo!’s senior vice president of international operations, was quoted as saying that “It is very difficult to do business if you have to wake up every day and say, okay, whose laws do I follow?”

In fact, Yahoo! blocked the sale of Nazi paraphernalia from its French website. But the activists argued that French citizens could still view the American version of Yahoo!’s website, which carried no such restrictions. So the French court told Yahoo! to block French citizens’ access to those parts of its American site, which Yahoo! argued would be technically difficult and overly restrictive. The case wound up in an American federal court, where it was eventually thrown out because it wasn’t “ripe” enough. But the way this case was handled brings up points that are relevant to the China situation.

The first issue to keep in mind is that Yahoo! had a separate site in France. That site complied with the laws in France without question; since there is a law that says, among other things, that Nazi paraphernalia cannot be purchased by French citizens, the search engine’s site in France blocks auction listings for Nazi artifacts and Nazi apologist websites. This makes sense; if you’re going to do business in a particular country, you must abide by that country’s laws.

The case raised another interesting issue, which is not directly relevant at the moment. Because of the way it was handled, the ruling indicated that United States courts can have jurisdiction if a plaintiff who is not a U.S. native tries to enforce censorship orders from another country on U.S. websites. So if China tried to enforce censorship orders on Google’s U.S. website, a U.S. court could rule on the case.

There was a third issue that the court was at least very clear on: if the French activists had tried to order Yahoo! to prevent U.S. citizens from seeing Nazi paraphernalia on its U.S. website, that would have been an easy ruling. Clearly, U.S. laws would apply—and such censorship would not be permitted. It is worth noting that, at least on this level, sovereignty laws have been recognized on the Internet. The digital world is not borderless, and hasn’t been for more than half a decade.

What does this mean as far as Yahoo!’s situation concerning Shi Tao? Michael Callahan, senior vice president and general counsel of Yahoo!, testified concerning this case and other China-related issues recently in front of Congress. He spoke before the Subcommittees on Africa, Global Human Rights and International Operations, and Asia and the Pacific. In his testimony, he made a number of important points.

First of all, he laid out the facts of the case, which have been distorted in the press. For openers, when Yahoo! China was required to provide information about the user, the company “had no information of the nature of the investigation.” Indeed, law enforcement organizations do not typically explain why they are demanding information from technology companies—whether those organizations are located in China or the United States. Yahoo! China has rigorous standards in place as to when it will turn over information to law enforcement authorities.

According to Callahan, “At the time the demand was made for information in this case, Yahoo! China was legally obligated to comply with the requirements of Chinese law enforcement…Failure to comply in China could have subjected Yahoo! China and its employees to criminal charges, including imprisonment.” A responsible company does not expose its employees to that kind of legal risk.

Does that mean that Yahoo!’s hands were completely tied in the situation? In a manner of speaking, the search engine’s hands were tied the minute the company set foot on Chinese soil. Callahan recognized this point when he said that “Ultimately, U.S. companies in China face a choice: comply with Chinese law, or leave.” Realistically, no Internet company is going to leave—not with a market of 110 million Internet users to reach, a market that will continue to grow. Personally, I would very much respect the choice of any company that decided not to compromise its principles, and turned down that market. But I don’t see it happening in any field as cutthroat as the search engine market is proving to be.

It has been said that ideas are bulletproof. It has also been said that the only way for evil to win is for good men to do nothing. The truth is, people aren’t bulletproof…and sometimes, when it looks like people are doing nothing, something really is happening, under the surface. Yahoo! co-found Jerry Yang pointed this out during a question and answer session at the Thomas Weisel Partners Internet and Telecom Conference in San Francisco recently. “People don’t realize that being in the market every day there, and being on the ground, we are seeing changes, on the whole, for the positive,” he said.

Callahan, in his testimony before Congress, pointed out several examples of the power of the Internet in China. For instance, in late November 2002, state media in China tried to cover up information about the outbreak of a new respiratory illness. But word of SARS got out on the Internet, which “forced the Chinese government to be more transparent and to vigorously attack the problem,” according to Callahan.

Callahan also mentioned the comments of a Chinese Academy of Social Sciences researcher, reported recently in the New York Times. “This expert stated, ‘At first, people might have thought it [the Internet] would be as easy to control as traditional media, but now they realize that’s not the case.’” The Internet’s liberalizing effect may not be merely difficult to avoid, but inevitable.

Even so, there are certain actions that Yahoo! and other search engines hope the government will take to attack these issues. Yahoo! has said that it is willing to “work with industry, government, academia and NGOs to explore policies to guide industry practices in countries where content is treated more restrictively than in the United States and to promote the principles of freedom of speech and expression.” But that does leave one wondering: is this an issue for governments to resolve? Or is there some way for a business to take a stand? And if so, is it then hypocrisy to try to work within the system for change rather than against it?

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