Table of Contents

Comment Icon0 Most Western observers suggested that China’s entry into the World Trade Organization (WTO) in 2001 would inexorably lead to an open society with improvements in human rights and the rule of law. Yet the past few years have shown that China’s political status quo has been maintained. One year after its WTO membership, China’s macroeconomic situation improved with a gross domestic product (GDP) growth of 7.9% (Xinhua News, 2009), while media censorship and human rights suppression persisted. Attracted by the potential revenue from China’s massive market, several multinational Internet companies that wanted to do business in China had little choice but to subject themselves to the will of the Chinese government.

Comment Icon0 Yahoo! Inc. was the first major U.S. Internet content company to make headway into the Chinese market, by operating its Chinese-language search engine from Beijing in 1999 (Yahoo! press release, 1999). As part of Yahoo!’s early entry into China, the company voluntarily signed the “Public Pledge on Self-Discipline for the Chinese Internet Industry” initiated by the Internet Society of China (ISOC). Even though it was not legally necessary, it was probable that Yahoo! intended to show goodwill to this major professional association for the Chinese Internet industry. However, human rights groups were clearly upset, since they expected a U.S. company to help introduce democratic reform into Chinese society. Instead, the signatory committed companies to “energetic efforts to carry forward the rich cultural tradition of the Chinese nation and the ethical norms of the socialist cultural civilization” by observing all Chinese Communist Party’s industry regulations (Internet Society of China, 2002). In defense, Yahoo!’s associate senior counsel Greg Wrenn explained that “the restrictions on content contained in the pledge impose no greater obligation than already exists in laws in China”. To date, neither Microsoft nor Google has signed ISOC’s pledge.

Comment Icon0 As with all Chinese search engine services, Yahoo! China at adheres to the PRC’s censorship by maintaining a block-list with thousands of words, phrases and web addresses to be filtered from search results. Blocked websites include Radio Free Asia, Human Rights Watch and New York Times, while searches for politically sensitive keywords would either deliver no response or generate an error message (Human Rights Watch, 2006). Yahoo! search engine filtering also allows for news blackouts of major controversial events, such as when the police opened fire on demonstrators in the “Dongzhou” village in 2005 (Reporters Without Borders, 2005).

Comment Icon0 Besides information censorship, Yahoo! has also disclosed private-user data from their Chinese-language email service to Chinese law enforcement agencies. Four of the most pertinent cases Yahoo! assisted with included the arrest and conviction of Chinese journalist Shi Tao in April 2005, Internet writer Li Zhi in December 2003, pro-democracy activist Jiang Lijun in November 2003, and dissident Wang Xiaoning in September 2003 (Human Rights Watch, 2006). In particular, Shi Tao’s arrest came as a shock to the American public after they discovered that Yahoo! had provided the journalist’s private email conversations to the Chinese authorities, leading to the arrest of this 37-year-old writer for Dangdai Shang Bao (Contemporary Business News) and 10-year sentence in prison. In response to the public outcry to Shi Tao’s case, Yahoo! spokesperson Mary Osako said that “[j]ust 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” (Committee to Protect Journalists, 2005).

Comment Icon0 While Microsoft has had industry presence in China since 1992, the Chinese-language Microsoft Network (MSN) online portal was launched much later in 2005, after the formation of a joint venture between MSN and Shanghai Alliance Investment Ltd. (SAIL) to create MSN China in May 2005 (Microsoft News Release, 2005). One month into service, Microsoft quickly came under pressure from the press and bloggers for censoring words such as “democracy” and “freedom” in the titles of its Chinese blogs (Global Voices, 2005). By December that year, further ­­testing of the service revealed that censorship of MSN Spaces Chinese blogs had been extended beyond the titles of the full blogs to the titles of individual blog posts themselves (MacKinnon, 2006). Public outcry about MSN Spaces censorship peaked when the popular blog of Zhao Jing, writing under the pseudonym Michael Anti, was completely shut down on 30 December 30 2005 (Soong, 2005). Zhao had used his blog to speak out when propaganda authorities cracked down on Beijing News, a relatively new tabloid with a national reputation for exposing corruption and official abuse. The editor and deputy editors were fired and more than one hundred members of the newspaper’s staff walked out in protest. His blog content caused Chinese authorities to issue the removal request with Microsoft in China.

Comment Icon0 Public criticism of Microsoft’s action was so strong that they were called before the U.S. House of Representatives in February to explain its collaboration with the Chinese government in censorship practices. Microsoft representatives explained that it had to comply with Chinese demands, but made it clear that it was making efforts at being transparent with the process. This included: 1) being explicit with standards for protecting content access; 2) making blog content accessible globally while restricting violating material domestically in China; and 3) letting users be aware why content was blocked, by notifying them that access has been limited due to government restriction (Krumholtz, 2006). To some extent, this has been true for Microsoft’s MSN beta Chinese search engine, where blocked results have an error message explaining why content was unreachable. To date, Microsoft’s Chinese Hotmail servers have successfully remained offshore from mainland China in order to avoid the same ethical dilemma as Yahoo!’s email service, by citing that the data is not under PRC legal jurisdiction (Human Rights Watch, 2006).

Comment Icon0 Google’s entry into China became a test of their principles that infamously includes “You can make money without doing evil”. In September 2002, the PRC started blocking access to, redirecting users instead to Chinese search engines. Even though Google’s co-founder explained that no negotiations were made with the Chinese authorities, it seemed public outcry in China coerced the authorities to bring it back two weeks later (Dean, 2005). Testing by the OpenNet Initiative revealed that despite’s return to service in China, not all its features were functioning as they were outside of China. The most prominent feature to be missing from the search engine was Google cache, which gave users access to an earlier version of the page in case the recent version was inaccessible for any reasons. This feature obviously allowed users to read content that would have been otherwise filtered by the Chinese Internet service and content providers (OpenNet, 2004).

Comment Icon0 In December 2005, Google finally received its ICP license to operate in China. One month later, Google released a censored version of its search engine for the Chinese market. As with Yahoo! and Microsoft, Google became the censor by generating its own block-list based on its own research of what was being blocked by Chinese ISPs (OpenNet Initiative, 2006a). Google’s CEO Eric Schmidt explained that censorship was necessary for Google to provide better service to Chinese Internet users. He noted that although they were not enthusiastic about the restrictions, it would have been worse not to try to serve those users at all (Sullivan, 2006).

Comment Icon0 In all three instances of multinational Internet corporations doing business within the PRC, all of them succumbed to the Chinese government’s stringent censorship and law enforcement procedures by proactively helping to screen content. This demonstrated the level of influence the Chinese Communist Party has over China’s massive economy. While numerous human rights group may find that these U.S. corporations have brought little effect to the Chinese socio-political environment, they do appear to have a subtle, gradual effect by introducing more transparency towards their censorship practices.

Chapter 5.2.4 – Markets: Corporate Complicity from Foreign Companies


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