Yahoo In China: An Unfair Attack

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Original Source (TechCrunch)

There has been much coverage this week on the Congressional hearing into Yahoo’s disclosure of information to the Chinese Government. For those who missed it, in short Yahoo was attacked by both sides of politics for complying with a request under Chinese law, in China, to provide information on a political dissident.

The rhetoric was raw; San Mateo Democrat Chairman Tom Lantos called Yahoo moral pygmies, and Rep. Chris Smith, R-N.J., compared Yahoo’s cooperation with the Chinese government to companies that cooperated with Nazi Germany during World War II.

When it comes to China there are very few who will come to the defense of those who deal with the Chinese Government.

Yahoo’s actions might have been in part wrong morally, but legally they have done nothing wrong, and in a global economy this is even more true.

Consider what Yahoo has done. Yahoo China (which I’d note is only 40% owned by Yahoo) received a “subpoena-like document” that requested information from a sovereign nation. Yahoo General Counsel Michael Callahan contended that Yahoo employees in China had little choice but to comply with the government’s demands. “I cannot ask our local employees to resist lawful demands and put their own freedom at risk, even if, in my personal view, the local laws are overbroad,” he said.

For this, Yahoo has been called moral pygmies and been compared to a company trading with Nazi Germany. Lets flip this around: does the committee, or for that matter the American Government believe that companies trading in the United States should ignore local laws if and when they find them morally repugnant? I doubt they would, but this is the crux of what they are suggesting, unless of course they may be so arrogant to believe that US law should be the supreme law of the entire planet. Consider if Baidu set up an American subsidiary, and the FBI subpoenaed them trying to find information on a terrorist. Would they not expect Baidu to comply with the request? If Baidu failed to comply would the Committee and US Government support them in their refusal to comply?

I’m not suggesting that the Chinese political dissident in this case was a terrorist, but understand that some one advocating the overthrow of the Chinese Government is not dissimilar to some one doing the same thing in the United States, even if the two nations would disagree on categorization based on the means advocated.

Foreign and US companies trading in the United States are expected to comply with local laws, even those that many would now consider to be morally and legally indefensible. It was Google who refused to comply with subpoenas from the Justice Department in 2005, where as Yahoo complied. Other actions of the United States Government raise eyebrows world wide: the suspension of Habeas Corpus comes to mind.

China is not like Nazi Germany, even if I don’t agree with some of what the Government does there, and to suggest that it is like Nazi Germany is an insult to the victims of WW2 as well as the Chinese people. Presuming China is Nazi Germany, why is it that the United States is importing approx $280 billion of Chinese goods every year? If this committee is seriously anti-China, and this reflects the will of the Government, why does trade continue? why are Chinese companies allowed to trade in the United States and conversely US companies in China? This can be stopped: look at the current sanctions on Iran for an example.

Ultimately, Yahoo has been made a scapegoat for the flaws of US foreign policy. If the US Government is as serious as the rhetoric of this committee would suggest, they’d stop trade with China tomorrow, but that’s not going to happen, is it. The executive team at Yahoo may be on shaky moral ground, but legally they have done nothing more than be a good corporate citizen, no matter which country they operate in.

The comments made by readers there are also very interesting. Some samples below:

Duncan, your post here conspicuously omits the consequences of Yahoo’s actions. People who advocated free elections are now in prison thanks to Yahoo, and could be there a long time. By not addressing the human cost and hiding behind what is “legal”, you make a very one-sided case. I appreciate that the Chinese government is better than it was. And sure, they’re better than the Nazis, in that they haven’t killed six million Jews. But somewhere between 500,000 and 3,000,000 million were killed during the Cultural Revolution. And hundreds or thousands were killed during the Tiananmen incident in 1989. Their current leader, Hu Jintao, wasn’t involved in that; instead he spent that year cracking down on the Tibetans. So let’s just say that the Chinese government’s hands are not particularly clean.

Anybody who’s not sure about the current state of things should take a look at the latest Amnesty International report:

http://web.amnesty.org/report2006/chn-summary-eng

The reason we continue to trade is that we believe that engagement will help more than sanctions. But “continuing to trade” is not the same thing as “helping put Chinese activists in prison”, and I’m disappointed that you seem eager to conflate the two.
- William, November 8th, 2007 at 3:36 am

...On a (kind of) related point, the current US government is guilty of innumerable foreign policy disasters that are far, far worse than this. Perhaps people’s attention should be focused on those rather than a single transgression from Yahoo, no matter how morally unacceptable it may be.
- Chris, November 8th, 2007 at 3:51 am

Somehow I doubt the US would have a problem if Yahoo or any other American company helped a Middle Eastern regime capture a blogger, say oil-rich Saudi Arabia.

Suggesting that Yahoo should disobey Chinese law and put its Chinese workers at risk to please some imperialist lawmaker on the other side of a plant is a disgrace to Chinese sovereignty … I’m fed up of what happens in America being America’s business and what happens in the world being America’s business, we all know they’d defend their sovereignty with a bang so why do they not extend that to the Chinese?

The Chinese have the sovereign right to set and enforce any law they wish. America could easily stop American companies going to China but as usual the hypocritic capitalist wouldn’t do that … you can’t have it both ways.

These Americans need to realize they don’t control the world, especially when they are so opposed to the world controlling them (ie. Koyoto).
- Bob Jones, November 8th, 2007 at 3:57 am

Thank you Duncan and most of those commenting here for being insightful and unbiased. I find it refreshing that not everyone in the United States has their arrogant heads up their ____ and think that we have some inherent right to impose our will over everyone else in the world. While I don’t agree with China’s policies and hope there is change around the bend there, as others have said, Yahoo respected the laws and sovereignty of they country they are doing business in. If you can’t respect the laws of the country, then you shouldn’t and can’t do business there. Yahoo is not there to make a political statement by resisting the laws, they are there to do business. Period.
- jb, November 8th, 2007 at 6:19 am

Duncan, I completely agree. We can’t do business in China, profit from it, and selectively disobey certain laws in China. Besides, businesses are not political activists in China - that simply wouldn’t work.

By doing business in China, we support the oppressive regime somewhat. But we also develop an ally and help to bring China from poverty to prosperity, which is good for everyone.

What people don’t realize is that China cannot suddenly give everyone their civil rights or have a completely free market. The West is successful because it developed and grew over a very long period of time. In order to rapidly develop the economy of China, the communist party must maintain order and control. If they don’t, there will be more unrest, someone else will come to power, and China could collapse.

So while Rep. Chris Smith sits in Washington with a smug look on his face, he ignores the unique challenges that China faces, and the many instances of injustice that occur in the US (for instance, illegal wire tapping - maybe he should scold AT&T).
- exapted, November 8th, 2007 at 9:32 am