Obeying Orders – Yahoo! in China

Originally posted 2005-09-19 13:44:44. Republished by Blog Post Promoter

Via Instapundit, a point we blogged about a week or two ago — some detail on the other side of the argument in the Washington Post:

Questioned about [its] decision [to cooperate] at a conference in China, Yahoo’s co-founder, Jerry Yang, declared, “To be doing business in China, or anywhere else in the world, we have to comply with local law.” His response, according to The Post, “drew spirited applause from many in the mostly Chinese audience.”

In fact, it is not at all clear that Yahoo’s excuse is legitimate. American companies are not always allowed to deviate from U.S. practices when operating in foreign countries. Companies are forbidden, for example, to engage in bribery, even in countries where bribery is condoned. American companies have also been successfully sued in American courts for violating international human rights laws. More important, in 1989 Congress specifically forbade U.S. companies to sell “crime control and detection” equipment to the Chinese. At the time, that meant police gear, such as truncheons and handcuffs. Members of Congress have recently asked the Commerce Department to clarify whether that law covers the sale of filters or other repressive information technology. If the conclusion is that it doesn’t, maybe it’s time for Congress to have a look at that law again.

It’s a problem, though. We can legislate all we want; do you think that the rest of the world will be so particular? It will not. American companies will lose market share and influence, and the majority of Chinese will lose the benefit of contact with and influence of American companies. Yet on the other hand, we know that there must be moral limits on doing business in a way that furthers repression. In the now notorious case of IBM, for example, arguably IBM was the only company at that time that had the technology that the Third Reich was seeking. If indeed the company knew what it was being used for, it was surely immoral to sell it.

But what of a commodity? The only basis for not selling something such as Internet “content,” which is essentially packages (dressed up all sorts of ways) of data, is that you don’t want blood money in your purse. What Yahoo! does not provide can be more or less obtained somewhere else, even if not quite as cheaply or attractively. But there isn’t a dollar on earth that isn’t tainted in this way — where do you draw the line?

One thing it seems Yahoo! could, and probably should, do is keep as little confidential or incriminating information on its servers, or allowing opt-outs. And I would say that if indeed the Chinese forbid the provision of opt-outs or anonymity for users within its borders…. then Yahoo! is crossing that line if it stays.

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Author:Ron Coleman

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2 Responses to “Obeying Orders – Yahoo! in China”

  1. May 21, 2011 at 11:33 am #

    If you do business in foreign countries, you should obey the laws and follow the rules of that country even if it is illegal in the United States.

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  1. BizzyBlog » I Do Not “Yahoo!” Update: WaPo Weighs In - March 6, 2007

    [...] Sept. 19 Update: Likelihood of Confusion is more forgiving of Yahoo! on the grounds that companies from the rest of the world will move in if we don’t. My response: If the Foreign Corrupt Practices Act in the mid-1970s, which essentially prohibited American companies from bribing foreign government officials to get business, didn’t ruin our ability to do business in the rest of the world, why would refusing to cooperate with a police state that wants to jail a journalist cause significant long-term harm? [...]

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