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Wallet wide open, eyes wide shut? Corporate responsibilities and int'l markets

"What is the right course for an American company doing business in countries like China or Russia?

"Ignore opportunities completely?

"Turn a blind eye and forge ahead?"

So asks the Wired GC, riffing on my recent post about Yahoo's decision to give Chinese authorities access to user e-mails and news that Russia has shown "contempt for the rule of law by seeking the expulsion of Canadian lawyer Robert Amsterdam."

The Wired GC answers his own question:

"I would say "no" and "no."

Bloggers are generally split on the issue, with some calling for Yahoo's boycott and others agreeing with Yahoo that the company's hands were tied by Chinese law. Why does the Wired GC vote no? For the shareholders -- he recommends any enterprise consider applying host government powers to one's own bottom line:

"In the short run, Yahoo's Jerry Yang is correct that companies must observe local laws if they want to do business in a host country. But once they decide to invest there, they are now part of the system. If that system does not comport with basic levels of individual and property rights (and due process), they should work with others to let host governments know that continued investment is contingent upon change. Yahoo may have a different view down the road if one of its lawyers in China is jailed for seeking to enforce legal rights against a recalcitrant government ministry over content restrictions on Alibaba.com ...

"This isn't just altruism, either. Concerns about host country legal systems are really part of enterprise risk management." (More)

One media company who decided China wasn't worth the risk is Time Warner, writes Rebecca MacKinnon in her recent post, "Internet Censorship & Corporate Choices." I recommend you read her excerpt of this Bloomberg article in which CEO Dick Parsons describes in detail Time Warner's decision not to agree to ban words such as "democracy" because of how it would look in the United States.

"Companies do have a choice," MacKinnon concludes. "Investors who care about free speech should reward them for making the right choices."

What do you think? As I asked earlier this month, when, whether and how will American e-mail consumers respond to the case of user Shi Tao, the journalist whose private e-mails Yahoo turned over to the Chinese authorities and which were instrumental in his incarceration. Will Yahoo's reputation, credibility and consumer trust truly be damaged, a la Nike after the Vietnam sweat-shop debacle? Will we see a global community coalesce around privacy rights and freedom of speech for individual e-mail users in the next decade, particularly as Chinese Internet consumers gain numbers and, hopefully, power? Will the American privacy movement continue to gain momentum or stall, now that both the House and Senate have renewed a version of The Patriot Act? Or will each individual Web consumer have to reinvent the value online privacy for themselves -- tantamount to child care for working parents?

We know how well that worked.

Posted by Product Team on September 26, 2005 at 06:47 PM | Permalink | TrackBack (0)