• by Wendy Davis , Staff Writer @wendyndavis, October 27, 2008

In 2004, Chinese journalist Shi Tao used what he believed was an anonymous account from Yahoo to tell an overseas organization that the Chinese government had warned his newspaper against covering the 15th anniversary of the Tiananmen Square crackdown. Another Chinese dissident, Wang Xiaoning, had posted a message calling for political reform to a Yahoo Group.

Both were arrested and sentenced to 10 years in prison after Yahoo revealed their names to the Chinese authorities. Since then, the company has taken a lot of flak for that decision, including a public condemnation by Congress. The families of the dissidents also filed a lawsuit, which Yahoo settled last year.

Additionally, shareholder Andrew Knopf sued the company this summer for breaching its fiduciary duty by cooperating with the Chinese authorities -- a move that he said harmed the company's "goodwill and reputation."

Now, Yahoo, along with frenemies Microsoft and Google, has agreed to a voluntary code of conduct for dealing with repressive regimes, according to the San Francisco Chronicle. That paper reports that the guidelines call on companies like Yahoo to push back, somewhat, by interpreting governmental requests for information narrowly.

But these types of voluntary agreements only go so far.

Yahoo -- which sold its China division to Alibaba Group and became a minority stakeholder in 2005 -- has always said it had no realistic choice other than to honor the Chinese government's request for information.

U.S. companies like Yahoo tend to argue that they must follow the laws in other countries where they do business -- even if that means disclosing names of users whose only crime was to criticize their leaders.

But if Yahoo and other U.S. businesses want to protect their users, they're going to have to consider flat-out defying foreign governments. Yes, it's possible that this course of action could result in companies shuttering abroad. Even so, there's a long-term benefit to standing up for human rights.