Yahoo In China
This week, Yahoo settled a lawsuit brought against the company by two Chinese citizens and their families. The lawsuit accused Yahoo of aiding and abetting torture under the Alien Tort Claims Act and the Torture Victims Protection Act. Yahoo had been giving Chinese authorities the names of dissidents who were then arrested, tried, and imprisoned -- guilty of using Yahoo services for pro-democracy activity. Two of these citizens, now in prison with ten year sentences, attracted the attention of the global community. In September, 2002, Yahoo turned over account information of Wang Xiaoning, who was charged by China of "inciting subversion" (creating a publication that advocated "a multiparty political system, separation of powers, and general elections"). Later Yahoo turned over information for Shi Tao, who China accused of transmitting "state secrets" (information about China's plans for handling the anniversary of Tiannamen square).
Yahoo defended its actions, saying it was bound to Chinese law. Furthermore, the questions had no place in American courts, they said, since Yahoo had: "no control over the sovereign Government of the People's Republic of China, the laws it passes and the manner in which it enforces its laws."
Yahoo In France
This is very different from what Yahoo said in a case in the French courts in 2000, when they claimed that they were an American company not subject to the laws of France. In that case Mark Knobel, a Paris resident, had found a cache of Nazi mementos being sold on Yahoo auction sites. Knobel asked Yahoo to remove the merchandise, a request that AOL had honored in a similar situation two years earlier. The company founders, Jerry Yang and David Filo were busy celebrating the dot com era. Their company namesake, "Yahoo", is one is who is "rude unsophisticated and brash", and the stock price was close to $500 a share.1 Yahoo refused to remove the Nazi items.
"'It is very difficult to do business if you have to wake up every day and say 'OK, whose laws do I follow?', said Heather Killen, a Yahoo vice president, "We have many countries and many laws and just one Internet"'
While different than their China claim, their train of thought was apt. The Internet in 1990 was a new place, a proper noun -- like Atlantis or Shamhala. Internet businesses were much closer to the manifesto issuing 1990's, when some of the Internet's first users fostered ideas about Cyberspace, the democratic, borderless social space over which sovereign governments could not lord. In the midst of e-commerce proliferation, many inside and outside of the technology grappled with the question of whether nation-states would take a lesser role.
However, French lawyers in 2000 didn't buy Yahoo's argument. French laws applied to radio and television, why would they not apply to the internet? Judge Jean-Jacques Gomez ordered Yahoo to make the Nazi paraphernalia inaccessible via the French internet. Yahoo then tried to argue that they couldn't technologically remove Nazi merchandise on sites hosted in the United States for the sake of the French. It was impossible -- how could you tell where the user was geographically located?
The court drew in expert witnesses who demonstrated that this assertion was false. Yahoo at the time was serving up French ads to French users from sites the company had mirrored in Switzerland. Yahoo's actions weren't protected under the laws of a sovereign US. In 2001 after more protracted dispute and non-compliance with the court requests, Yahoo removed Nazi merchandise.
In the Chinese case, as in the French case, Yahoo was cagey. They first testified to Congress that they had no idea of the fates that befell the Chinese whose names the company had turned over to the government. But a translated copy of the Chinese authority's warrant turned up on the internet. Congress held another hearing, and the committee's title indicated the tone the meeting would take: "Yahoo! Inc.'s Provision of False Information to Congress.". House Foreign Affairs Committee Chairman Tom Lantos (D-CA) (very active himself fighting crimes against humanity), subjected Yahoo's CEO and council to scathing rebuke, and demanded that Yang apologize to the families of imprisoned men. Shortly thereafter, a cowed Yahoo settled with the families.
Yahoo et al: Stateless to Stateful to....?
In 1990 when international discourse circled the question of whether states were relevant, Yahoo based its defense in France on the sentiment they weren't. In July, 2002, Yahoo entered China's business world with stock trading at $9.71, humbler than the 2000 highs. Yahoo was one of 300 companies to sign a document issued by the Chinese government, "Public Pledge on Self-Discipline for the Chinese Internet Industry". The companies agreed to follow various Chinese dictates aimed at cracking down on the internet's potential to democratically inform and enlighten, to question the government. The Chinese surveillance and censorship society blossomed. Few people in the business hungry US found these companies' stances disagreeable. Human Rights Watch was one who did fear the worst, warning in August 2002, that Yahoo "risks complicity in rights abuses". "If it implements the pledge, Yahoo! will become an agent of Chinese law enforcement."
Today, the US dithers about whether waterboarding is torture or not, revels in its own abundant state secrets, and wiretaps to its heart's content, covering its actions with the sinister haze of terroristic threats and legal immunity. Contractors in Iraq have upon occasion raped, killed and pillaged -- but there's always profit. The US leaps to do business with countries led by borderline or full-fledged tyrants who spout various "nationalist" ideas. Despite the current milieu, taking the moral high ground is worthwhile every now and again. Talking about "spread of democracy" serves certain ends. There are instances when the chimes of a declarative moral stance resonate with a public eager for seemingly anachronistic sentimentalities, like when a Senate committee member lambasted Yahoo during the hearings: "morally you are pygmies".
In the article "Yahoo Isn't the Only Villain", the Los Angeles Times points out that the entire Chinese national firewall, espionage program and internet surveillance system is built and supported with U.S. technology. Cisco built the firewall and supplies other technology. Skype (Ebay) scans instant messages,Google's search filters offensive ideas, and Microsoft, Dell and H.P. also participate. Many of these companies aren't new to the game, IBM supplied the technology for the efficient Nazi state too.
The head of the Chinese company, China Security and Surveillance, who also serves as the technology director of the ministry of public security that runs Project Golden Shield. The company recently incorporated as a US publicly traded company to encourage western investment. China Security and Surveillance financed itself with loans and private placements with 17 US institutional investors. China Public Security Technology and other companies have done the same thing.
The New York Times reported that the Chinese security industry was valued at $500 million in 2003 and is predicted to be 43 $billion by 2010. Finance message boards such as Yahoo's buzz with anticipation. Tom Lantos is leading the charge to set up guidelines for US companies working in China. If accomplished, it will be a feat -- businesses busily hack away at the effort.
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1In the book, "Who Controls the Internet, Illusions of a Borderless World," Jack Goldsmith and Tim Wu describe Yahoo's challenge to France's control of the internet back in 2000. They trace the history that led to the French legal battle and the position that Yahoo subsequently took with China.
