Session 5: Roundtable on Corporate Action and Responsibility
SESSION 5: ROUNDTABLE – Corporate action and responsibility
Moderator: Rebecca MacKinnon, Assistant Professor, Journalism & Media Studies Centre, The University of Hong Kong
* Issac Mao, Co-founder, CNBlog.org
* Charles Mok, Chairman, Internet Society of Hong Kong.
* Ching Chiao, VP Community Relations, DotAsia.
* Joshua Rosenzweig, Manager of Research and Programs, Duihua Foundation
* Duncan Clark, Chairman, BDA
Rebecca MacKinnon will lay out some questions and observations to begin the discussion. First of all, people ask how the Internet is changing China, but not so much about how China is changing the Internet. Is there choice regarding the direction of the global Internet, and how do individuals and companies decisions affect that course, or is it inevitably moving in one direction? With this in mind, what is the role of Net and telecom companies in shaping China’s standards and regulatory norms? Do they have flexibility to make choices, and will the norms established in China determine or influence global norms?
Referring to the previous panel’s Lokman Tsui, many Westerners tend to view the Great Firewall and similar activities as setting up a dichotomy of good countries vs. bad countries. It makes it difficult for companies to operate, besides being false.
“Ultimately, to succeed in China, businesses must assume the goals of the Communist Party as their own” – Mr. X, a foreign media entrepreneur based in China, Far Eastern Economic Review, May 2008 (http://www.feer.com/essays/2008/may/chinas-holistic-censorship-regime).
People in the West have been quite focused on issues such as Yahoo! and Shi Tao, Cisco’s router sales, Skype filtering text chat via its Chinese partner, MSN China blog censorship, Google.cn. Others have expressed that they have no choice. Is that really the case? Human Rights Watch is finding wide variations in how Google, Baidu, MSN, Yahoo! and others censor, which indicates they are making choices about how they interpret and follow the rules.
Hong Kong University is testing blog censorship on various platforms, censorship decisions being made by employees of those Internet companies, not police officers looking over their shoulders. One part of the testing is posting excerpts of the Dalai Lama’s Chinese letter on various platforms. Of 17, 10 censored the content – not all. In another test, Mop.com censored content excerpted from – Xinhua. On Blogbus, if you post anything with the name “Hu Jintao”, you are denied, possibly because they worry what follows will be sarcastic or critical remarks.
What this seems to demonstrate is that there is some choice in how companies comply with Chinese regulations, since they don’t all have identical behavior. Does this mean then that there can be something like best practices?
Another aspect is that we are seeing bloggers sue their hosting companies, using arguments about consumer rights and breach of contract, since the blogger has not violated any of the terms of service. This can be a more fruitful approach than the Cold War black and white perspective often used.
There are efforts to create a global industry code of conduct that is truly global, focuses on transparency and accountability, and supports the user’s ability to make informed decisions about how and when to use a service. How do companies involved in China participate in this given the rhetoric that is often used to discuss their actions?
The first question is to Isaac Mao: Do you think privacy is an issue that Chinese Internet users can and want to push for?
Mao points out that the Internet is still relatively young in China, and so is the issue of privacy. For so long they have not had their own identity and it was irrelevant, but now privacy is becoming a more important issue as cold calling, identity theft and other problems begin to intrude upon their lives. You can buy databases of phone numbers and other contact information for millions of people for less than 100,000 RMB, and there is no regulation to prevent this. Will companies buy these databases, or spend more money to construct their own? (I’d imagine there’s also the potential that an employee will later steal the companies proprietary database to sell on the market) Companies are slowly learning that cold calling is not helping their business but in fact hurting their reputation, and instead respect their users. Focusmedia, a former portfolio of Mao’s, is one of China’s largest advertising firms. They bought a large database of mobile numbers and accounts, possibly acquired through an under the table deal with China Mobile, which they then boasted about to their clients. CCTV, on March 15th, revealed this scandal, which is convenient since Focusmedia is a competitor. Afterwards, Focusmedia’s stock plummeted on the NASDAQ. Lesson learned?
Guo Quan founded the China Netizens Party, and Google blocked search results for it. Guo sued Google demanding the results, and in the wake many China bloggers say that Google does not respect them. Mao says this is an example of how global companies can slip into bad behavior in China they would not ordinarily do.
MacKinnon for Joshua Rosenzweig: Dui Hua has shown that you can negotiate with the Chinese government and communication can work, are there any lessons to be learned? Also, Dui Hua played a role in revealing Yahoo! involvement in the jailing of Shi Tao, while having an intimate understanding of what happens to prisoners. How should companies make decisions about what information to release, etc.?
Rosenzweig: Corporate decisions need to be made with an understanding of the Chinese situation, not with expectations about how it will be perceived or dealt with in their home country. When Yahoo! gave information on Shi Tao, they argued that they were forced to reveal data based on a warrant. But warrants are not issued by courts as they are in the U.S., and Yahoo!’s argument betrays a failure to understand the difference. Police do not have to receive a warrant from a judge who evaluates the legality or constitutionality of the warrant. The Chinese government argues that state security trumps all rights, again very different from a US legal environment. The corporate HQ must make decisions about what they are party to with all of this in mind. On the other hand, these companies do not have much leeway in Rosenzweig’s opinion. The majority of cases where someone has been imprisoned due to what they’ve said online have not involved ISPs but rather regular police work. The analog version of online posts would be tracking down leaflets scattered on the street, but now its much easier as they can stay at their desks and gain weight finding the culprit online.
Another interesting development is that Chinese users who challenge companies, for example spam companies, can find themselves prosecuted for extortion, as the criminal justice system is used to protect business against unhappy consumers. Whats necessary is an independent judiciary, and a police force that does not value state security above all else.
Rosenzweig gave lectures in China recently about the issue of the death penalty in China, and problems that revolve around it. Discussing problems in the U.S. won’t necessarily change everything, but levels the playing field a bit by allowing that there are flaws elsewhere as well.
For Duncan Clark: You’re engaged by many people investing in technology in China. Do any care at all about any of this, or are they all about the money?
There’s some naivete on both sides: Western tech companies believe they are bigger game changers than perhaps they really are, while the Chinese side might see dreams of Harvard and instant wealth. These companies often suffer from “CEO Viagra”, believing that they are changing the universe and are “in China before they’re in China”. Who are the people in charge though? Are they ABCs, or locals, or nationalists, or Taiwanese, or otherwise? How do you coordinate these people? Chinese entrepreneurs are really a different kind of player than former executives of Microsoft or other Fortune 500s, and Yahoo! seems to have realized this by handing the keys to Jack Ma. They need fapiao, they need speed, they need to naturalize. So far they aren’t doing well; Google and Yahoo! are struggling, eBay has been humiliated. Western companies have been playing the China card because it seemed unclear who will win, but so far none of them are really winning. Indian companies are investing heavily overseas, the number two investor in the UK. Chinese overseas investment isn’t on the same playing field – China Mobile in Pakistan is not the same thing. If Chinese companies want to have major investments in the West, they will likely have to change the institutional culture, and that pressure will come from within as Chinese CEOs chomp at the bit. The “dinner table” dynamic in China is pretty clear when you consider the former CEO of Sina.com, Daniel Mao, is married to Hu Jintao’s daughter (he first said “wife” by mistake, Clark talks fast).
For Charles Mok: Where are Hong Kong companies in all of this? (Missed precise wording)
Mok: What is a Hong Kong company? It’s not strictly one thing, but assuming we’re talking about companies primarily based in HK, they don’t seem to have a very strong sense of their responsibilities beyond the letter of law when it comes to privacy and these sorts of standards. When it becomes a major inconvenience or a new opportunity for profit, Hong Kong businesses will take notice. Recently Mok has been receiving emails from a Mainland businessman claiming to know opportunities to avoid the Great Firewall (or Net Nanny).
Another way to look at it is to look at Hong Kong’s mass media, where there is a great deal of self-censorship. Many of them don’t appear to feel free to talk about certain topics, from Mok’s perspective as a citizen. Can we expect Hong Kong companies to be the guardians of free speech given this? On the other hand, Internet providers simply want fewer hassles, so if censoring invites scandal, they’ll avoid it.
One other angle: are Hong Kongers ready to play a role in improving the situation in Mainland China? Yes and no. Hong Kong people still have a relatively free spirit and believe they can say what they want to say, but in the past ten years he feels there has been an increased sense that there are things you know not to say. In the Edison Chen case, there was alot of immaturity. In protests, there was a venting of frustration but afterwards nothing more happens. Mok worries that in the near future the Hong Kong government will take a more paternalistic, nanny role to guard social morality.
For Ching Chiao: To what extent is this a result of culture, and to what extent are these problems and phenomenons a political one, from a Taiwan perspective? Also, having worked with ICANN and other global Internet standards, to what extent China’s Internet may be having a global effect?
Taiwan will be seeing the first direct flights to Beijing and Shanghai next month, and Ching will be able to reach those cities within 2 or 3 hours as opposed to 8 hours to reach Hong Kong. In Taiwan, green has been seen by government surveillance that you don’t love Taiwan. This was a secret until quite recently. Taiwan has been seriously affected by the arrival of Hong Kong’s Apple Daily in Taiwan, and satellite TV has saturated the island. The Internet has become a supplemental medium to all these other media (sounds like the US). Cyberpolice.cn and net.china.cn cover issues of illegal information. If you consider freedom of speech or corporate social responsibility, its like playing with a kite in Tiananmen Square. If you do, you’ll see many military policemen while people engage in certain activities. If you withdraw from such an activity you’ll draw attention to yourself as someone worried about what you are doing. (Didn’t quite follow all of this, or how the later points bear on Taiwan. Any attendees who can clarify, by all means leave corrections or additions in the comments).