Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
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Google in China

Introduction Using servers located in the United States, Google began offering a Chinese-language version of Google.com in 2000. The site, however, was frequently unavailable or slow because of censoring by the Chinese government. Google obtained a significant share of searches in China but lagged behind market leader Baidu.com. To achieve commercial success, Google concluded that it was imperative to host a Web site from within China. Given its motto, “Don’t Be Evil,” Google had to decide whether to operate from within China or to continue to rely on Google.com. If it decided to establish operations in China, the company had to decide how to deal with the censorship imposed by the Chinese government. As a result of an extensive debate within the company, cofounder Serge Brin explained their decision: “We gradually came to the realization that we were hurting not just ourselves but the Chinese people.”68 Google decided to establish the site Google.cn, but without features that allowed users to provide content. To avoid putting individuals in jeopardy of being arrested, Google offered neither e-mail nor the ability to create blogs, since user-generated material could be seized by the Chinese government. This allowed Google to avoid putting individuals in jeopardy of being arrested. Because Google would be required by Chinese law to censor search results associated with sensitive issues, it decided to place a brief notice at the bottom of a search page when material had been censored, as it did in other countries such as France and Germany which banned the sale of Nazi items. Google planned to exercise selfcensorship and developed a list of sensitive items by consulting with third parties and by studying the results of the Chinese government’s Internet filtering. Senior policy counsel Andrew McLaughlin stated, “Google is mindful that governments around the world impose restriction on access to information. In order to operate from China, we have removed some content from the search results available on Google.cn, in response to local law, regulation or policy. While removing search results is inconsistent with Google’s mission, providing no information (or a heavily degraded user experience that amounts to no information) is more inconsistent with our mission.”69 Google’s approach to entering China irritated the Chinese government. Within a month of offering Google.cn, Google was criticized by two government-run newspapers in China. The Beijing News criticized the company for not doing enough to block “harmful information.” Referring to Google’s practice of informing users when search results had been censored, the China Business Times wrote in an editorial, “Is it necessary for an enterprise that is operating within the borders of China to constantly tell your customers you are following domestic law?” Both publications claimed that Google was operating as an Internet content provider without a proper license.70 Reporters Without Borders, a Paris-based organization campaigning for freedom of expression, called the establishment of Google.cn “a black day for freedom of expression in China.” It stated: The firm defends the rights of U.S. Internet users before the U.S. government, but fails to defend its Chinese users against theirs. United States companies are now bending to the same censorship rules as their Chinese competitors, but they continue to justify themselves by saying their presence has a long-term benefit. Yet the Internet in China is becoming more and more isolated from the outside world.71 Other activists demanded that Google publish its censorship blacklist in the United States. Internet Censorship in China According to the U.S. State Department, companies offering Internet services were “pressured to sign the Chinese government’s ‘Public Pledge on Self-Discipline for the Chinese Internet Industry.’” Under the agreement, they promised not to disseminate information that “breaks laws or spreads 69New York Times, January 25, 2006. 70Washington Post, February 22, 2006. Google shared a license with a Chinese company, Ganji.com. This practice was common among foreign Internet firms. 71New York Times, January 25, 2006, op. cit. superstition or obscenity” or that “may jeopardize state security and disrupt social stability.”72 Providing Internet services required a license, which in turn required not circulating information that “damages the honor or interests of the state” or “disturbs the public order or destroys public stability …”73 Censorship in China involved self-regulation by Internet companies as well as government actions. The government did not provide a list of objectionable subjects—instead companies inferred which topics were out of bounds by observing what the government censors removed. The State Council Information Office also convened weekly meetings with Internet service providers. An American executive explained, “It’s known informally as the ‘wind-blowing meeting’—in other words, which way is the wind blowing. They say: ‘There’s this party conference going on this week. There are some foreign dignitaries here on this trip.’”74 Xin Ye, a founder of Sohu.com, a Chinese value-added Internet services firm, was asked how hard it was to navigate the censorship system. He said, “I’ll tell you this, it’s not more hard than dealing with Sarbanes and Oxley.”75 Zhao Jing, a political blogger in China, “explained that he knew where the government drew the line. ‘If you talk every day online and criticize the government, they don’t care. Because it’s just talk. But if you organize—even if it’s just three or four people—that’s what they crack down on. It’s not speech; it’s organizing.’”76 In December 2005 Zhao called for a boycott of a newspaper because it had fired an editor. In response, the Chinese government asked Microsoft’s MSN to close Zhao’s blog and Microsoft complied.77 Brooke Richardson of MSN said, “We only remove content if the order comes from the appropriate regulatory authority.”78 Yahoo! and MSN, as well as other sites, complied with Chinese law as well as exercising self-censorship.79 Robin Li, chairman of the Chinese search company Baidu.com, said, “We are trying to provide as much information as possible. But we need to obey Chinese law.”80 Baidu had reached an agreement that allowed the Chinese government to oversee its Web site and in exchange it avoided the disruptions of service and strict operating rules that plagued foreign Internet companies.81 In 2004 Yahoo! provided information to the Chinese government that led to the arrest of the journalist Shi Tao. Shi Speaking at an ethics conference on Internet search at Santa Clara University, Peter Norvig, director of research at Google, commented on the decision not to offer services such as e-mail and blogging in China. “We didn’t want to be in a position to hand over users’ information …. We thought that was just too dangerous …. We thought it was very important to keep our users out of jail.”94 Norvig justified Google’s policies in China. “Yes, it’s important to get information about democracy and Falun Gong. They also want to know about outbreaks of bird flu. We thought it was more important to give them this information that they can use even if we have to compromise.”95 Google continued to debate internally whether and how it should operate in China. It also hoped for guidance from the U.S. government and the industry. Norvig said, “We feel that the U.S. government can stand up and make stronger laws, and we feel that corporate America can get together and have stronger principles. We’re supporting efforts on both those fronts. We feel we can’t do it alone.”96 Norvig disclosed that Google was not keeping search logs in China. “They don’t have personally identifiable information but they do have IP addresses that are potentially identifiable with an individual.”97 That information was kept in the United States, and China could request that information through the U.S. State Department. Political Pressure in the United States In advance of congressional hearings on China and censorship, the State Department announced the creation of a Global Internet Task Force to decrease censorship and encourage change in other countries. Paula Dobriansky, undersecretary of state for democracy, human rights, and labor, said, “The Internet, especially, can be a liberating force. Topics once politically taboo can become freely discussed, and people can communicate anonymously. We must ensure it does not become a tool of repression.”98 Representative Chris Smith (R-NJ), chairman of the House Subcommittee on Africa, Global Human Rights, and International Operations, introduced the Global Internet Freedom Act that would impose restrictions on U.S. companies operating in China. It included a code of conduct, requiring that e-mail servers be located outside the country and licensing requirements for the export of technologies that could be used for censorship. Smith held a hearing in which Cisco Systems, Google, Microsoft, and Yahoo! testified and were grilled by subcommittee members. Commenting on China’s sophisticated censorship system, Smith said, “It’s an active partnership with both the disinformation campaign and …, and the secret police in China are among the most brutal on the planet. I don’t know if these companies understand that or they’re naïve about it, whether they’re witting or unwitting. But it’s been a tragic collaboration. There are people in China being tortured courtesy of these corporations.”99 The bill was passed by the subcommittee and sent to full committee for consideration. Representative Tom Lantos (D-CA), leader of the Congressional Human Rights Caucus and a survivor of the Holocaust, said, “These captains of industry should have been developing new technologies to bypass the sickening censorship of government and repugnant barriers to the Internet. Instead, they enthusiastically volunteered for the censorship brigade.”100 In congressional testimony Elliot Schrage, vice president of global communications and public affairs at Google, explained that China was an important market for the company. He said, “It would be disingenuous to say that we don’t care about that because, of course, we do. We are a business with stockholders, and we want to prosper and grow in a highly competitive world. At the same time, acting ethically is a core value for our company, and an integral part of our business culture.”101 Earlier in 2006 Google had refused to comply with a request from the U.S. government to provide information on Internet search requests.102 The government had asked Google for a random sample of 1 million Web addresses and a week’s search requests with any information that could identify the user removed. The information was to be used for a study to show that Internet filters were not sufficient to prevent children from accessing pornographic Web sites. The Department of Justice sought the information to help revive the 1998 Child Online Protection Act, which had been blocked by the Supreme Court and sent to the Court of Appeals for reconsideration. Google strongly objected to the request on privacy grounds and refused to provide the information. The Department of Justice then took Google to court to force it to provide the information. In the court hearing the government substantially scaled back its request, and the judge ordered Google to provide 50,000 random Web addresses. The judge also stated that providing the requested 50,000 random search queries could harm Google through a loss of goodwill among its users.103 In June Brin commented on the criticism Google had received. He said, “We felt that perhaps we could compromise our principles but provide ultimately more information for the Chinese and be a more effective service and perhaps make more of a difference …. Perhaps now the principled approach makes more sense.”104 In July Amnesty International launched a campaign against Internet oppression, mentioning Sun Microsystems, Nortel, Cisco, Yahoo!, Google, and Microsoft. Amnesty International stated, “Internet companies often claim to be ethically responsible—these pledges will highlight how their cooperation in repression risks making them complicit in human rights abuses and damages their credibility.”105

■ Preparation Questions

1. What principles are relevant for Google’s decision to enter China? Is censorship consistent with Google’s core values? Should compromises be made?

2. Why does the Chinese government censor information so aggressively?

3. Should Google have entered China?

4. Given that Google decided to enter China, should it have offered e-mail and hosted blogs? Should it have restricted its offerings more than it actually did?

5. Are Google’s practices sufficient? What else should it do?

6. Should Google lobby the Chinese government to change its censorship policies?

7. Should Google lobby the U.S. government to develop a policy to guide U.S. Internet companies in China?

 

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