US Internet Companies Navigate Tricky Terrain in Repressive Countries

Daily News Article — Posted on November 14, 2007

(By Patrick Goodenough, CNSNews.com) – Yahoo’s decision to settle a lawsuit with two Chinese journalists is focusing renewed attention on efforts to establish principles for Western firms operating in totalitarian countries. The Chinese journalists were jailed after Yahoo provided Beijing with identifying information from their Internet activities.

The World Organization for Human Rights (WOHR) USA, which brought the case on behalf of Shi Tao and Wang Xiaoning, said Yahoo had agreed to the settlement after “intense pressure” from lawmakers during a congressional hearing last week.

The terms of the settlement are to remain confidential, but Yahoo Chief Executive Officer Jerry Yang said in a statement the company would provide the Shi and Wang families with financial, humanitarian and legal support, and create a relief fund for other political dissidents.

Convicted in 2005 and 2003 respectively, Shi and Wang are serving 10-year prison terms each for material they published online. In both cases they were allegedly tracked down with the help of account-holder information Yahoo provided to the Chinese authorities.

Yang and Yahoo General Counsel Michael Callahan were lambasted during a Nov. 6 House Committee on Foreign Affairs hearing, with lawmakers accusing the company of collaborating with the regime and giving Congress incorrect information earlier about the Shi case.

Rep. Tom Lantos (D-Calif.), who chaired the committee hearing, said Tuesday the “long overdue” settlement of the lawsuit before the U.S. District Court for the Northern District of California was not the end of the issue.

“[Yahoo] and other U.S.-based Internet companies need to work harder to ensure that they resist any attempts by authoritarian regimes to make them complicit in cracking down on free speech – otherwise, they simply should not do business in those markets,” he said.

The WOHR said issues brought up during the settlement discussions included “considerations regarding future law enforcement requests for identifying Internet user information.”

Censorship, surveillance

Yahoo and other American companies operating in China — the world’s fastest-growing Internet market — and other repressive societies have come increasingly under the spotlight in recent years.

Google and Microsoft have been criticized for cooperating with China’s strict censorship requirements, as has Cisco for selling Internet surveillance technology to Beijing.

According to the OpenNet Initiative, a project of Cambridge, Oxford, Harvard and Toronto universities, Fortinet’s filtering software has been used by the military junta in Burma to restrict access to some Internet sites, and software from Secure Computing, another U.S. company, has been used for the same purposes by the Tunisian government.

Yahoo and others have defended their actions on the grounds that they have to comply with local laws in order to operate in foreign countries.

“Just like any other global company, Yahoo must ensure that its local country sites must operate within the laws, regulations and customs of the country in which they are based,” Yahoo said in 2005, when first accused of handing over information that led to Shi’s conviction for providing “state secrets to foreign entities.”

Several initiatives have been launched in recent years to help companies navigate the difficult terrain of operating in repressive countries.

Media freedom watchdog Reporters Without Frontiers has signed up 35 investment funds in the U.S., Europe and Australia to a declaration committing themselves to monitoring the activities of Internet companies working in those environments.

The signatories say they will support shareholder resolutions favorable to freedom of expression, and will call on Internet companies to adopt ethical codes.

They also want Internet companies to make information public allowing investors to gauge whether they are acting to ensure that their products and services are not being used to “enable Internet censorship, surveillance and identification of dissidents.”

The joint declaration, launched two years ago with an initial 20 signatories, was co-authored by Boston Common Asset Management, which said in a statement that “the long-term growth and viability of IT sector companies depends on the faith and perception of users that the Internet is open, reliable and secure.”

A spokesman for the Berkman Center for Internet & Society at Harvard Law School pointed Tuesday to another initiative, launched early last year, which brought together companies, investors, academics and human rights organizations to search for solutions to the freedom of expression challenges faced by companies doing business internationally.

The process “aims to produce a set of principles guiding company behavior when faced with laws, regulations and policies that interfere with the achievement of human rights.”

It also plans to establish a framework to implement the principles and to hold signatories accountable.

Participants include Yahoo, Google, Microsoft and Vodafone.