Wednesday, November 07, 2007

Jerry Yang, Yahoo, and China

On November 6, CEO and co-founder of Yahoo!, Jerry Yang, went before congress and answered for his company's role in imprisoning a Chinese reporter, Shi Tao. Tao was imprisoned by the government of China for the contents of an email obtained with the help of Yahoo. The email discussed practices of the government in dealing with the reporting of the anniversary of Tianamen Square. Tao was sentenced to a ten year prison sentence and has already served two years in a Chinese prison.
Yahoo has also aided the Chinese government in the arrests of three men accused of anonymous postings online. Two of these three men are still serving multi-year sentences for crimes against the government. General Counsel for Yahoo, Micheal Callahan has also been accused of offering false information to Congress regarding these issues. He, along with Yang, have offered public apologies, but neither has offered any future changes to Yahoo's practices that would resolve the issues at hand.
These cases raise the issue of which laws become more powerful when dealing with American companies abroad. China does not offer the same protections of speech and expression as the United States does, and American companies become pressured into following the local laws of a nation. Only when companies like Yahoo, Google, and Microsoft agreed to follow Chinese restrictions were the companies allowed to operate in China.
By cooperating with Chinese officials, Yahoo helped violate the human rights of Shi Tao. International law didn't seem matter here, when Yahoo was looking to keep itself operating within Chinese borders. Is it right for companies to lessen the protection of human rights in order to do business? Are internet companies under any obligation to protect its users? Or is it ok for these companies to do what they have to in order to access potential markets, regardless of human rights?

1 comment:

Lukovica said...

Yes, in order to do business in another country the company has to comply with the laws of that country. However, as some people have pointed out ( ) Yahoo! did have a choice: it chose to be subject to Chinese legal jurisdiction by providing an e-mail service hosted on servers based inside China, as opposed to a service hosted offshore only. (as some other internet companies do). That way Yahoo! wouldn't have been legally obligated to provide Chinese authorities with Shi Tao's account info.
We need to remember that as a matter of law, the corporation (such as Yahoo!) is obligated to maximize the profit of shareholders. This is its bottom line as defined by law. So, if there exists a choice, unrestricted by any regulations, between making profit at the cost of aiding and abetting human rights violators and not making profit, but promoting human rights, the decision will not be hard to make.
Is it ok for these companies to do what they have to in order to access potential markets, regardless of human rights?
Again, it depends to whom the question is posed. For me, and I am almost sure, for you, it is not “ok”. I, personally, would put it differently: it is abhorrent. I am not talking here specifically about Yahoo! You know, Yahoo! seems to be a paragon of corporate and social responsibility when we think of Unocal, for example.
For the people who run these companies, most of the things are ok, as long as they yield profit. As long as it’s a good marketing, investment, financial strategy, and there are no constraints on implementing it, it will take place. Yahoo! had a choice; it chose to be subject to certain laws because it seemed like a good financial strategy. For other companies a good financial strategy is to support regimes that allow them to operate without constraints (Chevron now is, I think, the only major corporation doing business in Burma. one would wonder why…) or to push for laws, which would allow them to operate in a cost-efficient way (sweatshops etc.) Btw, the workers have been awarded damages today.
We cannot expect corporations to protect human rights, or environment or anything else (unless they become convinced that it is financially sound decision), because it is not their purpose. I am not trying to say that people who run them are evil miscreants bent on destruction: many of them are thoughtful, reasonable, good people; many of them care about human rights issues and environment. It is the systemic problem: the legal status of the corporation, the ineffective laws and regulations that are put in place are the roots of the problem.