September 16, 2005

According to China experts and human rights advocates, strong criticism over Yahoo's involvement in the jailing of a Chinese journalist could trigger a wave of ethical and political overtones for American high-tech companies who have accelerated to get a piece of China's lucrative search market.

Yahoo, one of the Web's most popular search engines and portals, has faced unrelenting criticism following the disclosure last week that the company provided information that helped Chinese authorities convict a newspaper reporter on charges of leaking state secrets to foreigners.

In April, the journalist, Shi Tao, 37, was sentenced to 10 years in prison for passing on a propaganda directive about coverage of possible protests on the 15th anniversary of the Tiananmen Square crackdown.

Yahoo has offered few details about the episode, but at an Internet conference in China on Saturday, the company's co-founder, Jerry Yang, said the firm had little choice but to accede to the Chinese government's request.

"I don't like the outcome of what happened with this thing. We get a lot of these orders, but we have to comply with the law and that's what we need to do," Mr. Yang said.

Mr. Yang's comments have only intensified the vitriol being directed at Yahoo.

"The idea 'we're just following orders' is about as ethically corrupt as an organization can be," said Simon Davies, whose London-based nonprofit organization, Privacy International, has called for a boycott of Yahoo. "The argument advanced is essentially the Nuremberg defense. That was ethically discredited decades ago," he said.

A leading China scholar and former Asia-based journalist, Bruce Gilley, also denounced Mr. Yang's explanation. "That's an atrociously inappropriate comment," Mr. Gilley, who is an adjunct professor at the New School University, said.

"It sort of suggests that if someone was caught stealing a Yahoo e-mail account in Saudi Arabia, then Yahoo would step up and help the regime cut off their hand. That's not the expectation of an American company to go and take part in whatever repressive, noxious practice is found in various countries around the world."

Mr. Gilley and other analysts said the episode had echoes of the public-relations debacles that snared manufacturing companies such as Nike and Reebok in the 1990s, when they were accused of using sweatshop labor in low-wage Asian countries, including China. "Until now, in the Internet, we haven't had the same issue arise," he said.

Mr. Gilley said the sneaker and clothing companies initially took the position that Chinese law precluded some reforms urged by labor advocates, such as the creation of worker committees distinct from the communist-run trade unions. However, when the international companies insisted, local officials suddenly adopted a more flexible interpretation of the law.

Yahoo declined requests for an interview for this story. The company offered only a written statement that reiterated Mr. Yang's comments.

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The recent episode involving Yahoo also laid bare what some view as a double-standard: The same technology companies that are vocal and impassioned for online freedom in the West often fall mute when similar issues arise in China.

"It's a double standard, no question about it," a former businessman who now runs a foundation devoted to freeing prisoners of conscience in China, John Kamm, said. "They're for freedom of expression and privacy rights in this country, but with respect to China, they're not on that side of the fence.

It's very, very disappointing and regrettable," said Mr. Kamm, who was involved in translating the Chinese legal papers that disclosed Yahoo's involvement in the investigation of Mr. Shi.

"It's a double standard and a double face," a Chinese dissident who fled the country following the 1989 student protests, Fang Lizhi, said in an interview. "The American government gets one argument. When they tell the Chinese government, they use the other," said Mr. Fang, who is a physics professor at the University of Arizona.

In the West, Yahoo has been far from passive in dealing with legal challenges. The company vigorously fought a lawsuit brought in France by Jewish groups who contended that the sale of Nazi memorabilia in Yahoo auction postings violated French law. After losing in the French courts, the company pre-emptively sued the Jewish organizations in an American court in an attempt to block the application of French law to the firm's business.

The legal battle is currently before an 11-judge panel of the 9th Circuit Court of Appeals.

"Their whole argument in our case was the sword of Damocles was hanging over their head. They have to be free to do whatever they want, wherever they want, at all times," a lawyer for the Jewish groups, E. Randol Schoenberg, said.

He said Yahoo's more passive legal stance in China was probably due to the potential profits there. "They don't want to go to the mat for consumer privacy in China. That's a big market," the attorney said.

Last month, Yahoo announced a $1 billion investment in a China-based Web auction site, Alibaba.com.

Mr. Yang was born in Taiwan but migrated to America at the age of 10. He was a doctoral student in electoral engineering at Stanford when he created Yahoo along with another student in 1994. His personal holdings in the company are worth more than $2 billion.

During an Internet conference last year, Mr. Yang was asked about Yahoo's business in China. He immediately mentioned his roots.

"I'm a Chinese-American, and I don't think that gives me a special privilege to say what I'm about to say," Mr. Yang began. He went on to make an often repeated argument that the Internet is a sure force for good in China.

"They have started down a path that is a one-way street, meaning that they have to feed this economy by giving the newly-found middle class more education, more technology, more independence. ... Those things will drive the things we want them to have, which is freedom of speech and freedom to communicate and freedom to do things," Mr. Yang said at the O'Reilly Web 2.0 conference in San Francisco.

"We operate in China, and we face this decision every time to say, 'Are we helping the government on a regime that is not good?'" Mr. Yang said, adding that he does not agree with Chinese policies.

"Those are not the values I believe in, but we probably deal with that on a level across the world. I mean, in Germany we have that issue, in the U.K. we have that issue.

In China, it's only exacerbated because it is a communist regime that is market driven very rapidly." He called his view "pragmatic" and said it would help China "see the right result come sooner."

Mr. Gilley said the recent episode involving the Chinese reporter undercuts Mr. Yang's assertions. "This is just a blatant refutation of the idea that these companies being in China is going to help make China a less repressive place for its citizens," Mr. Gilley said.

Source: NY Sun

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