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Yahoo in China – Victim or collaborator?

On the afternoon of April 20, 2004 Shi Tao, head of the Editorial Department of Contemporary Business News, located in Hunan Province, PRC, took notes at a department meeting. Those notes contained references to information in a CPC official document entitled: "A Notice Regarding Current Stabilizing Work" -- a euphemism for the central government's efforts to keep dissent to a minimum on the eve of the anniversary of the protest in Tiananmen Square.

That night parts of those notes were emailed to the editor of Democracy Forum, an organization in New York, that later disseminated their contents. The Chinese government learned of the leak and began a search for the source. Information, in the form of an IP address and e-mail account, that assisted the Chinese police in locating him was supplied by Yahoo Holdings (Hong Kong) Ltd., a subsidiary of the U.S. based company.

That source was, in fact, Shi Tao and for this he was arrested by the Chinese authorities in November, 2004. He was subsequently tried and convicted of passing state secrets to an 'overseas hostile element.'

According to a statement by Yahoo's co-founder Jerry Yang:

"Yahoo had to comply with a demand by Chinese authorities to provide information about a personal e-mail of a journalist who was later convicted under state secrecy laws. The demand for the information was a "legal order" and Yahoo gets such requests from law enforcement agencies all the time, and not just in China."

Yang added, "I cannot talk about the details of this case."

The facts, and just as importantly Yang's statement, raise a number of serious questions. What responsibility, if any, does Yahoo (or any business operating in a foreign country) have to cooperate with authorities in the enforcement of its laws? Is Yahoo guilty of 'collaboration'? Can any U.S. firm do business in China ethically?

It would be facile to simplistically declare, in a tone of moral righteousness, that Yahoo should immediately cease all Chinese operations. Not only should one not pass over too lightly the serious profit potential represented by so large a market ?? foregoing which would harm the livelihoods of thousands directly -- but one needs also to consider soberly the ethical pros and cons of the case.

While it's true that a journalist, acting to promote freedom under circumstances dangerous to his own well-being, was arrested by a government that is well-known to regard individual rights as of little value, it's also true that abandoning interaction with that country may lead to even worse conditions for the very individuals one would most like to support.

It has been argued that doing business with authoritarian dictatorships helps keep them in power and there's much to recommend such a view. But to argue further, as is often done, that withdrawing from all trade with anyone in such countries will help to substantially weaken such regimes goes against much recent history. One need only look at Russia, Iraq, Cuba, Iran, and other countries around the world where U.S. companies were or are forbidden by law to engage in trade. Decades of U.S. trade embargoes has done little to erode the power of those governments, nor to reduce the threat they represent(ed) to the U.S.

Though it might be argued more successfully that, were all foreign businesses to forego trade with such countries, the desired effect would occur -- that is not an option. Not, at least, unless all U.S. businesses were legally forbidden from trading with any country that continued to trade with dictatorships, in which case all foreign trade would cease entirely. Hardly a real option.

For, while authoritarian governments do profit from trade between U.S. and foreign businesses -- it gives them goods to confiscate and helps to keep down internal demand for government welfare services -- at the same time two other effects occur which benefit not only those U.S. businesses but advocates of freedom as well.

Materially improving the lot of individuals engaged in such trade helps to provide them with the means to continue trading. That has the effect of creating potential allies within the foreign country itself, and this because of the second effect: Regular contact with individuals in foreign businesses exposes them to the lifestyle and values of their trading partners.

Over time, and in small increments, that contact helps encourage internal dissidence opposing the authoritarian regime, while giving them the means to turn their dissent into practical action. Individuals in such countries inevitably get a glimpse of 'how the other half lives.' That exposure helps to overturn such countries from within.

But these, I suggest are secondary considerations. The primary issue is the deeper one of the need to see the relation between enlightened self-interest and the support of free speech.

Just as it's facile to assert that Yahoo and other businesses should refrain from doing business in such countries, it's equally facile to assume that Yahoo was morally wrong because it 'placed considerations of profit above ethical ones', as has been said in so many words by, among many others, Reporters Without Borders -- the organization that broke the story recently.

The basis on which such claims are made is that Yahoo has a responsibility to forego a profit potential of many billions in order to avoid assisting the suppression of free speech within China and other similar countries. But what are the moral responsibilities of the executives of Yahoo and what creates this dilemma in the first place?

Clearly, the primary villain(s) is(are) the person(s)that suppresses free speech in the first place. I.e., in this case, the Chinese government. It is this fact that creates the dilemma in which Yahoo finds itself.

Does this mean that Yahoo's actions were morally acceptable, because they were acting under compulsion, or practically necessary, because there's no alternative short of withdrawing from China entirely? No on both counts.

Yahoo's managers, like any individuals acting in a situation where individual rights are compromised, has options. In particular, they can lie. It isn't difficult for IT organizations to appear inept, and to sustain that reputation for years.

Faced with a demand to reveal the address of your neighbor to a gun wielding skin-head you have leave to direct him to an empty lot. Of course, one needs to consider such issues as the likelihood of the criminal returning to threaten you. No one's pretending morality is always simple in the real world.

Apart from adherence to an abstract principle, do Yahoo's executives have additional incentives to confound the Chinese authorities? Yes. Yahoo, even more than most businesses, has a strong vested interest to protect and promote free speech. Their very existence as a company depends on it.

Accepting the Chinese authorities' dictate regarding the suppression of certain search results may be a short-term necessity to any business presence in China. But this does not require, morally or practically, that Yahoo actively collaborate in undermining the foundation on which their business, even in China, depends.

As to the fate of Shi Tao, Yahoo's managers would do well to give serious thought to changing company policy after reading this:

Shi Tao’s defense attorney stated: "Considering that defendant Shi Tao’s actions did not result in causing extremely serious harm to state security or interests and that his attitude in admitting his crimes was good, please punish him leniently." This was investigated and found to conform with the facts; therefore, the opinion of the defense can be accepted by this court.

Defendant Shi Tao is sentenced to 10 years’ imprisonment.

Apart from adherence to a highly valuable moral and political principle, they might otherwise find that $1 billion investment in Chinese e-commerce company evaporate when the commissars of the CPC decide that even semi-free speech is more trouble than its worth.

Date posted: September 29, 2005 Last modified: May 23, 2018 Total views: 2484