Microsoft & Yahoo: Complicit in Repression?

Here’s a story from today’s New York Times, about Microsoft having taken action, at the request of the Chinese government, to censor a blogger using one of their services. Here are a few key paragraphs:

BEIJING, Jan. 5 – Microsoft has shut the blog site of a well-known Chinese blogger who uses its MSN online service in China after he discussed a high-profile newspaper strike that broke out here one week ago.

The decision is the latest in a series of measures in which some of America’s biggest technology companies have cooperated with the Chinese authorities to censor Web sites and curb dissent or free speech online as they seek access to China’s booming Internet marketplace.

The shutdown of Mr. Zhao’s site drew attention and condemnation this week elsewhere online. Rebecca MacKinnon, a fellow at the Berkman Center for Internet and Society at Harvard Law School, wrote on her blog, referring to Microsoft and other technology companies: “Can we be sure they won’t do the same thing in response to potentially illegal demands by an overzealous government agency in our own country?”

Robert Scoble, a blogger and official “technology evangelist” for Microsoft, took a public stand against the company’s action. “This one is depressing to me,” he wrote on Tuesday. “It’s one thing to pull a list of words out of blogs using an algorithm. It’s another thing to become an agent of a government and censor an entire blogger’s work.”

Another American online service operating in China, Yahoo, was widely criticized in the fall after it was revealed that the company had provided Chinese authorities with information that led to the imprisonment of a Chinese journalist who kept a personal e-mail account with Yahoo. Yahoo also defended its action by saying it was forced to comply with local law.

It is generally true that, when conducting business overseas, companies have an ethical obligation to comply with local law. But there are exceptions. There are cases when following the law — at home or abroad — is the wrong thing to do.

Thomas Donaldson has a very nice perspective on the issue of when/whether to follow local laws (or more generally, local standards) when conducting business abroad. Donaldson has a book on this topic, The Ethics of International Business (OUP, 1991). But I’m more familiar with his article “Multinational Decision-Making: Reconciling International Norms.” Roughly, Donaldson’s heuristic for dealing with conflicts between home-country standards and host-country standards goes like this. We can roughly divide such conflicts into two types: 1) those that are rooted in economics (e.g., some countries can’t afford to implement & enforce the sorts of environmental standards that Westerners take for granted), and 2) those that are rooted in basic cultural differences (e.g., Japan’s resistence to putting women into senior management positions.) Donaldson says these two types of situations should be handled differently.
For Type 1 situations, Donaldson advises managers to ask themselves this question: would the “folks back home” accept the host-country’s lower standards if they themselves faced a similar economic economic situation. If they would, then it may be permissible for the company to follow the lower, local standard in the present situation.
For Type 2 situations, Donaldson advises managers to ask themselves these two questions, in THIS order. First, is it necessary to engage in this questionable practice, in order to do business in this country? If not, don’t do it. If it does seem necessary, proceed to the next question. Second question: does engaging in this practice violate fundamental human rights? If not, it may be permissible to follow local standards. But if doing so would violate human rights, then don’t do it. Ethically, you ought to cease operations & get out of the country.

This is where the rubber hits the road, as far as ethics is concerned. Companies like Microsoft and Yahoo should do the right thing, or get out.

1 comment so far

  1. […] the end, it seems to me that if the behaviour in question is not intrinsically unethical (as Microsoft and Yahoo helping China’s government spy on dissidents arguably was) and if the behaviour doesn’t violate the firm’s […]


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