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Posted at 01:00 AM ET, 09/20/2011

U.S. companies playing by Chinese cyber-rules

U.S.-based tech firms seeking access to China’s exploding population of computer users bend too easily to China’s rules of censorship and surveillance, according to a new report by SecDev Group, a think tank focused on regions at risk from violence and insecurity.

And though the United States is at the forefront of nations supporting freedom of expression online, the report says that voluntary codes of ethical conduct so far have not worked.

In “Collusion and Collision: Searching for guidance in Chinese cyberspace,” SecDev researchers criticized search engine firms for “conforming to China’s censorship and surveillance policies” as the price of doing business in a market with 450 million Internet users.

“Internet companies operate in a narrow space between collusion and collision with the Chinese government,” said the Ottawa-based group, which has produced illuminating reports on vast campaigns of Chinese cyber espionage on the Dalai Lama, dissidents and other groups.

In 2005, Yahoo complied with a request by the Chinese government to hand over information related to the private e-mail correspondence of Chinese dissidents – including Chinese poet Shi Tao -- who were then jailed, the report said. (Yahoo later apologized. It sold its China business to Chinese tech firm Alibaba Group in 2005 but maintained a 40 percent stake in Alibaba Group.)

Microsoft, which has e-mail, search engine and blog platform services in China, shut down a popular blog by reporter Zhao Jing at the government’s request in 2005, the report stated. And like Yahoo, Microsoft has complied with government requests to filter online content, the report said.

Microsoft “both respects local authority and culture and makes clear that we have differences of opinion with official content management policies,” a company spokeswoman told SecDev, in a quote included in the report..

Router firm Cisco was also the subject of scrutiny. “Irrefutable evidence has surfaced that Cisco hardware is a critical component of China’s online surveillance system,” the report said. (Cisco has said in other news reports that its equipment is built to global standards and not customized for use in any particular nation.)

One company -- Google -- bucked the trend, opting to shutter its search engine business on the mainland rather than continue to censor at the government’s request, SecDev noted. The firm did so after discovering that China had hacked into its computer networks and stolen valuable intellectual property, while also compromising e-mail accounts of dissidents.

As a result of its decision, however, Google has paid a price. Microsoft has moved in, partnered with Chinese search engine Baidu and grabbed more of the market.

The SecDev report applauds U.S. policy as articulated by Secretary of State Hillary Rodham Clinton, who has aligned Franklin D. Roosevelt’s four freedoms – freedom of speech, freedom of religion, freedom from fear and freedom from want – with a fifth: freedom of expression online.

But voluntary codes of ethical behavior have not worked, SecDev concludes. The think tank urged a new approach: legally enforceable, binding, specific commitments. What is needed, it said, were polices that ensure that U.S.-based businesses operate ethically at home and abroad.

“As responsible corporate citizens, these companies –as well as their home governments—cannot continue ‘business as usual,’ ” said Rafal Rohozinski, founder and chief executive of the SecDev Group.

By  |  01:00 AM ET, 09/20/2011

 
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