Reference no: EM131292483

GOOGLE GOES TO CHINA
Renee Flemish and Linda Trevino

Gu Ge (roughly translated as ‘‘harvesting song'') is the name Google gave to the mainland Chinese version of its Internet search service. Mainland China boasts a huge and growing market of Internet users (the biggest in the world and now ahead of the United States). But China also has arguably the most sophisticated government censorship in the world. The same Chinese government that censors films and bans television programs and rock bands is now sanitizing search pages by systematically filtering out keywords, pictures, and news accounts. The government also records every keystroke, records sites that individuals surf, and searches for any material that government authorities find offensive. Guards are also posted at Internet cafes to ensure that no one is looking at banned content.

In 2006, Google decided that to retain access to China's huge and growing market of internet users (it then had 26 percent of the market, compared to 60 percent for Beijing-based rival Baidu.com), the company would cooperate with the Chinese government's demand to block Chinese customers' access to Internet sites that include information about topics the government deems off limits to its citizens- such as democracy, human rights, Tibet, Taiwanese independence, the meditation technique Falun Gong, or information about the Dalai Lama.88 Searches either turn up ‘‘acceptable'' information or no information and a message saying, ‘‘operation timed out.''

Here are a few examples of ‘‘scrubbed'' searches on Gu Ge:
Google was criticized for its decision by U.S. Congress members, who accused the company of ‘‘decapitating the voice of dissidents in China,'' ‘‘enabling evil,'' and facilitating the oppression of Chinese citizens via ‘‘sickening collaboration'' with Beijing. Google was also said to be violating the UN Declaration of Human Rights, which says, ‘‘Everyone shall have the right to hold opinions without interference'' and ‘‘Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive, and impart information and ideas of all kinds. . . . '' Some critics even introduced legislation that would require U.S. companies to locate their computer hardware outside China, create a code for all U.S. Internet companies doing business in repressive countries, curtail technology exports to countries with censorship policies, and create a State Department office of internet freedom.

Bloggers argued that Google had a ‘‘moral duty not to bow to China's wishes.'' The Reporters Without Borders group said that Google's decision to ‘‘collaborate'' with the Chinese government was a ‘‘real shame.'' And, Amnesty International condemned Google's self-censorship policy. The Electronic Frontier Foundation argued that if these companies are going to negotiate away users' rights, the companies should at least work together to form a code of practice. On the other hand, the Chinese allege that they are no different from Western countries, like France and Germany, that restrict Nazi-related content. And company defenders say that these companies are helping to open up Chinese society in the long run.

Google's Position in 2006
* Despite admitting to compromising its values, Google maintained that the company would serve a more useful role in China through participation. Withdrawing the service would be ‘‘a greater evil,'' the company said. Although the decision to go into China ‘‘involved a lot of hand-wringing and weighing the consequences of censoring results . . . providing some information to Chinese users is better than none at all.'' The CEO called the choice a ‘‘difficult but principled decision.''

* Google's chief executive, Eric Schmidt, said that Google had a responsibility to abide by the law in every country where it does business. ‘‘We had a choice to enter the country and follow the law, or we had a choice not to enter the country . . . I think it's arrogant for us to walk into a country where we are just beginning operations and tell that country how to run itself.''

* The company decided to disclose censorship at the bottom of Web pages by saying, ‘‘In order to follow local laws, some search results are not displayed'' In addition, Google chat, e-mail, and blogs were not included in the company's service offering in China. Google did not wish to find itself in a position of having to turn over e-mail files to the government. (The company recently resisted U.S. government requests for data on what people were searching for).

Google's Stated Goals and Values
Never settle for the best.'' The perfect search engine would understand exactly what you mean and give back exactly what you want. . . . Google's goal is to provide a much higher level of service to all those who seek information, whether they're at a desk in Boston, driving through Bonn, or strolling in Bangkok. Following is a list of Google's stated goals and values:

1. Focus on the user and all else will follow. Google has refused to make any change that does not offer a benefit to the users who come to the site . . .

2. It's best to do one thing really, really well.

3. Fast is better than slow.

4. Democracy on the web works. Google works because it relies on the millions of individuals posting websites to determine which other sites offer content of value.

5. You don't need to be at your desk to need an answer. The world is increasingly mobile and unwilling to be constrained to a fixed location.

6. You can make money without doing evil.

7. There's always more information out there.

8. The need for information crosses all borders. . . . Our mission is to facilitate access to information for the entire world.

9. You can be serious without a suit. Google's founders have often stated that the company is not serious about anything but search . . .

10. Great just isn't good enough. Always deliver more than expected.
How Do Other Tech Companies Compare?

Here are a few examples of how other tech companies have handled similar issues:
* Yahoo handed over e-mail files to the Chinese government to aid in the arrest of two ‘‘dissident'' journalists who were using their e-mail system to spread news. The reporters are in a Chinese jail.

* MSN, acting on Chinese government orders, shut down a blog critical of local politicians. MSN has a clear policy (now) of taking down websites only when served with a legal order to do so, and of publicly stating why the site was taken down rather than merely deleting it.
* Cisco has been accused of helping the Chinese government build its censorship-heavy Internet system by providing the hardware to block Internet sites.

* MSN, Yahoo, Cisco, and Google made a statement asking the U.S. government to pressure the Chinese to abandon its efforts to censor expression on the Internet.

* Skype similarly agreed to filter phrases such as ‘‘Falun Gong'' and ‘‘Dalai Lama.''

Recent Developments
In January 2010, Google threatened to end its business in China. This was a potentially expensive decision to pull out of the world's largest and most rapidly growing Internet marketplace. Although Google has lost market share and remains a distant second to Baidu.com (China's own Internet search service), estimates say that a decision to leave China would mean passing up between $250 million and $600 million in revenue in 2010. That's a small chunk of the firm's $22 billion in total revenue. But Internet access in China is expected to continue to grow from the current 300 to 400 million regular users to about 840 million by 2013.

The company would thus be deciding to forgo an enormous future market. Google's decision was precipitated by the actions of sophisticated hackers, originating in China, when they broke into the e-mail accounts of Chinese human rights activists. At least 20 large companies in multiple sectors were affected. Google released a statement that linked the cyberattacks with government censorship, saying, ‘‘These attacks and the surveillance they have uncovered-combined with attempts of the past year to limit free speech on the Web-have led us to conclude that we should review the feasibility of our business operations in China.''

The topic immediately increased traffic on Twitter. China began blocking Twitter in June, 2009 along with Flickr (the photo editing site) and Microsoft's Bing (Internet search).95 Google said it would try to work with the Chinese government in arranging to conduct censorship-free searches, but that it was no longer willing to continue censoring results on Google.cn. If an agreement could not be reached, it would end Google.cn. Given the financial loss to shareholders, some wondered whether the executives had the right to make this decision. Sergey Brin and Larry Page, Google's founders, have that right because Google has two classes of stock-and Page and Brin, who hold 58 percent of the stock, have veto power over everyone, including the company's CEO.

A National Public Radio report suggested that for Brin, misgivings about the company's original 2006 decision trace back to his family history. He was born in Russia, under Communist rule, and has strong negative reactions to governments with oppressive policies.96 In an interview with NPR on January 14, 2010, the firm's chief legal officer, David Drummond, defended Google's initial decision to accept some censorship. He said the company felt a responsibility to serve the Chinese market and felt that it could be a force for opening up that market. He noted that the company has been ‘‘a thorn in the government's side'' since entering the market and has ‘‘pushed back at every opportunity.'' Experts suggested that the company's response was a way of saying, ‘‘enough is enough.''

The company decided it could no longer protect the security of its users in China. The firm's new stance has been praised by human rights activists and Internet civil liberties specialists, one of whom said, ‘‘It helps realign Google's business with its ethos.''97 Another said, ‘‘No company should be forced to operate under government threat to its core values or to the rights and safety of its users.''98 China's response was that firms doing business in China must obey its laws and it did not back down. In March, 2010, while maintaining R&D work in China and a sales force, Google decided to close Google.cn and direct its Chinese users to its uncensored Hong Kong website, hoping to make uncensored information more available. When Hong Kong was set up by international treaty, China agreed to allow it to operate free from most Chinese laws. But, Chinese users quickly reported that searches for politically sensitive information on the Hong Kong website produced blank pages.

Case Questions
1. Why do you think so many American citizens and lawmakers reacted negatively to Google's decision in 2006?

2. Does the fact that Google is an Internet company change societal expectations of it regarding information openness?

3. Was Google facing an ethical dilemma (values in conflict) in 2006?

4. Analyze the dilemma from consequentialist, deontological, and virtue ethics perspectives. Based on your analysis, what do you think is the right thing to do? Do you agree with Google's CEO that the company made ‘‘a principled decision?'' Why or why not?

5. Google's motto is ‘‘Don't Be Evil.'' What does that mean? And how does it apply in this situation? Is the company living up to its motto? Is it a good motto?

6. Consider Google's other values related to democracy, not doing evil, focusing on the user, providing information, and so on. Can Google do business in China and maintain these ideals? If so, how? If not, why not?

7. In defense of its 2006 decision, Google said that it complies with the law in countries where it does business. But the author of a book on IBM and the Holocaust says that IBM used the same defense in the 1930s when it provided Adolf Hitler with the tools to keep ‘‘the wheels of the Holocaust running on time.'' The author says, ‘‘[they] want to be good Americans in the U.S. and good collaborators in China. They want it both ways but there are certain things we must not do.''99 Do you agree with the company's stance? If so, what changed in 2010?

8. Google and other companies routinely comply with government rules to censor other types of material-especially pornography, but also hate speech and other moral matters such as sexual images in Islamic countries. Are some forms of censorship acceptable? If so, where and how would you draw the line?

9. Tom Donaldson rejects ethical relativism (‘‘when in Rome'') and ethical absolutism (insisting on exactly the same standards everywhere for every situation). Instead, he recommends that companies operating overseas adopt an ethical threshold based upon core values such as the Golden Rule and respect for human rights. Those must then be translated into specific guidelines. Do you think Google's 2006 operating standards were consistent or inconsistent with Donaldson's recommendations? If you were going to recommend a set of standards for Google, what would they say and why?

10. Every transcultural set of ethics standards for global business practice includes the principle of human rights. For example, the UN Global Compact says that companies should protect internationally proclaimed human rights and not be complicit in human rights abuses. The Caux Roundtable Principles state that businesses should contribute to human rights in the countries where they operate. Is Google's behavior consistent with these expectations? Do you agree that the company ‘‘negotiated away users' human rights'' in 2006?

11. What about the company's decision to pull out of China in 2010? Do you agree with it? How might it affect other companies doing business in China? Does it change how you think about the company's original decision?