TechWag

Yahoo agrees to pay compensation to jailed bloggers families in what has to be a first of its kind response to how censorship, blogging, and restrictive countries operate on the internet, and with big American companies. While the compensation is good, and is a big step in helping define what is appropriate and what is not appropriate for an American company to do with other governments, nothing will replace the years lost for people who are trying to blog their viewpoints that can run contrary to what a government wants to do.

Yang did say during the hearings that Yahoo will do something for the people serving prison sentences. But he and Callahan would not promise to reject all future requests for information relating to political dissidents. They argued that doing so would put Yahoo employees in those countries at risk of arrest for failing to comply with the laws of those governments. Regarding the proposed U.S. law, the Global Online Freedom Act, Yang and Callahan said they agreed with the spirit of it. In a separate statement, however, Yahoo said its position is that the bill, as it stands, could “effectively ban” U.S. companies from doing business in emerging markets such as China. Source: Business Week

However, as stated above, there are solid business reasons to want to compete in china and other countries, no company can turn its back on billions of potential customers. What makes this a catch-22 for yahoo is:

1. Complying with Chinese law can subject their own employees to arrest, but you need to have local employees operating under local law unless there is an equivalent to a status of forces agreement. If you are a citizen of a country however, you have to abide by that countries laws.
2. Doing business in a major populated country makes sense, no matter how restrictive the government is, and no business can turn their backs on that country. If Yahoo is banned in china, they stand to loose significant income, opportunities and the ability to influence government law in relationship to what services they provide.
3. Nothing will replace the time that people spend in Jail, and 10 years is a long time, while not admitting guilt, they did admit that they did the work. But this is also something that other internet companies have done to keep a foot hold in the Chinese and other countries markets.
4. Yahoo probably has seen their use in china gutted, no one wants to do business with a company that will turn them in, bloggers and others have gone somewhere else.
5. There was no way to win this one, caught between the Chinese government who has one set of rules, and popular opinion as well as the United States government who beat them on the congressional floor. This was a perfect kobyasi maru test of yahoo, choose the lesser evil, and unfortunately Chinese dissidents were the ones who paid the ultimate penalty.

These kinds of moral corundum’s are nothing new in business, from graft, bribery, greed, and other ways of doing business, American companies have always had to compete in a dirty business environment internationally. While yahoo had no chance of a happy ending on this one, at least they are attempting to do good things by compensating the families, but in the longer run, internet companies need to figure out what is more important, people and their right to be dissidents, or doing business.

Tags: web 2.0, technology, business, Politics //