• by Wendy Davis , Staff Writer, February 14, 2006

Three of the largest online media companies, Google, Yahoo and Microsoft, have found themselves on the defensive for their business practices in China. All three companies are accused of enabling the Chinese government to censor speech, and Yahoo's also being blamed for providing crucial information that resulted in the jailing of two journalists.

Tomorrow, representatives from those companies are slated to testify before a Congressional subcommittee about their business practices in China.

Rep. Christopher H. Smith (R-NJ), chairman of the Congressional subcommittee on Africa, Global Human Rights and International Operations, called the hearings. In a media advisory, he condemned the Internet companies for, "in essence becoming a megaphone for [C]ommunist propaganda and a tool for controlling public opinion."

He reportedly intends to propose a host of new rules governing how U.S. companies interact with repressive regimes.

Apart from any possible legislative oversight, Yahoo, Google and Microsoft all face public relations debacles due to their actions in China.

The Paris-based group Reporters Without Borders charged that Yahoo revealed the identity of e-mail user Shi Tao to the authorities. Last year, the Chinese journalist was sentenced to 10 years in prison for revealing state secrets. His crime? He had used his personal Yahoo e-mail account to forward an e-mail his newspaper had received from the Chinese government to a U.S. human rights group.

Reporters Without Borders also accused Yahoo of giving the Chinese government information that led to the 2003 conviction of Li Zhi--sentenced to 8 years in prison for criticizing the government on the Web.

While Google and Microsoft haven't yet been accused of landing people in a Chinese jail, both companies are confronting a backlash for assisting the Chinese government's censorship efforts.

Microsoft recently removed a Chinese journalist's blog on MSN Spaces. And last month, Google launched a China search engine that censors Web sites seen as critical of the government.

In anticipation of Wednesday's hearing, Yahoo Monday released a 614-word philosophical statement about its beliefs. The company argued in the document that providing Internet access abroad ultimately serves a social good. "Citizens across the globe are benefiting greatly from increased access to communications, commerce and independent sources of information," stated the company. "We are deeply concerned by efforts of governments to restrict and control open access to information and communication. We also firmly believe the continued presence and engagement of companies like Yahoo! is a powerful force in promoting openness and reform."

Google appears to have begun preparing for controversy over its China plans even earlier--at least as far back as November, when it tapped lawyer and public policy expert Elliot Schrage to become vice president of global communications and public affairs.

Schrage, scheduled to testify tomorrow, formerly served as senior fellow in business and foreign policy at the New York-based Council on Foreign Relations. He also advised global corporations about their operations abroad.

An article he wrote for the August 2003 Harvard Business Review, which explored the possibility that U.S. courts would consider human rights claims against companies based on business practices in developing countries, now seems particularly prescient. He began the article with a hypothetical memo from a general counsel to a global corporation: "It's only a matter of time before some company becomes the Enron of human rights abuse. If we're not careful, it could be ours."