• TechCrunch, Thursday, November 8, 2007 11:45 AM

"The rhetoric was raw," says TechCrunch as Congress this week made an example of Web giant Yahoo for its willingness to comply with Chinese law in its operations inside the country. Yahoo on several occasions provided the government with information on the activities of political dissidents on its Web sites, leading to the arrest of a human rights and democracy advocates.

Politicians on both sides of the spectrum castigated the Web firm for its actions; San Mateo Democrat Tom Lantos, the hearing chair, provided the key sound byte: "morally, you are pygmies," he said. Rep. Chris Smith (R-NJ) likened Yahoo's compliance to companies that cooperated with the Nazis during WWII.

Indeed, it was an evening for rhetoric and politicking, because Yahoo has done nothing legally wrong in complying with Chinese law: the company was issued a subpoena by the government and had little choice but to acquiesce if it wanted to continue operating in the country. For another thing, TechCrunch points out, Yahoo China is only partly owned (40 percent) by the Sunnyvale, Calif.-based Yahoo. Report author Duncan Riley asks the pointed question: "Does the committee, or for that matter the American Government believe that companies trading in the United States should ignore local laws if and when they find them morally repugnant?" No, "but this is the crux of what they are suggesting."

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