MSN's Gag Order

Fresh off its controversial flip-flopping on support for a gay-rights bill in Washington state comes a news report that Microsoft is cooperating with the Chinese government to censor users of the MSN Spaces section of its MSN China Web portal.Obviously, adhering to government rules and regulations is key to establishing business abroad. Some might even say it's the polite thing to do. Who are we to go busting in somewhere and insist every thing be done our way (actually, come to think of it--that is what Americans are known for!)? But the fact is, be it as tourists or as businesses, we enter other countries as guests and are subject to their laws and customs. We expect no less from people and businesses that come here.

And of course, Microsoft is in the business of making money, and most businesses that look at China today see billions upon billions of the stuff oozing out of current and future markets. Given China's new emphasis on economic growth, and it seems, encouragement of capitalism, now is the time to get in, and get in good. Getting in at all means working with the government.

And there's no question that conducting business in a communist country poses a special set of challenges over and above the usual red tape.

Still, the idea that an American business would help a government censor its people, to however small a degree, should leave us a little uneasy. These companies aren't just representing themselves in foreign countries, they represent the United States as well.

It's a tough call. Should American businesses support oppressive government policies or requests, or even local practices deemed unsafe or unfair under U.S. law?

Two areas where U.S. businesses have profited from looser regulation overseas involve the use of sweatshops and child labor. The argument that no matter how abhorrent those practices may seem to Western eyes, they are improving the lives of the workers there has not stopped American consumers and sometimes, regulators and legislators, from protesting, boycotting, or taking other measures to punish U.S. companies that benefit from these practices. It can be risky. Just ask Kathie Lee and Nike, both of whom were forced into many public apologies and had to change their businesses practices to quiet the roar of disapproval.

In IT, some U.S. workers and labor pundits hold that outsourcing exploits foreign workers by underpaying them. The foreign workers aren't complaining, but the topic was volatile enough to turn up as an issue in the last election and to instigate some state laws forbidding the use of outsourced workers on government contracts.

Our government, meanwhile, routinely declares some countries persona non "business" grata and to varying degrees forbids businesses from doing what they do in there. Arms dealers can't sell weapons, oil companies can't buy or sell oil products and expertise, and technology companies can't sell technology. Sometimes we even tell tourists where not to go.

The Internet is trickier. It brings everything and everyone together. Geographic boundaries disappear. Basically, there is no there. It's easy to talk to people around the world or read newspapers half a continent away. Open sites can't control who comes in the door. Nor can they (really) control the posting of links to their content by other sites. This means that if a country like China doesn't want its Internet users reading or talking about democracy, it's going to find that activity is a lot harder to track and control online, as opposed to simply shutting down a magazine stand, pulling a book from a library shelf, or busting up a physical meeting. Which doesn't mean the government isn't slapping down "subversive" users.

The Congressional-Executive Committee on China Web site reports on a Web-site manager named Huang Qi released after serving a five-year sentence for subversion. His crime? According to the C-ECC site, they included using the Internet to disseminate essays on matters such as "democracy" and advocating democracy and freedom.

China does impose strict limits on publishing and on access and use of the Internet, deploying filters, registration requirements, and other forms of surveillance, but determined people will find ways around it. It's inevitable. And it's already happening there with illegal chat sites. As fast as the government shuts them down, they reappear. As for the banned words, well, the Chinese could come up with code words to get around that, too.

The Associated Press quoted an MSN sales executive as saying that heavy government censorship is part of the regulatory landscape in China, and that in Microsoft's view, "Even with the filters, we're helping millions of people communicate, share stories, share photographs, and build relationships. For us, that is the key point here."

I don't disagree with either point.

But I do think companies doing business in places like China should at least be thinking up front about how far they are willing go. And what can they do to subtly negotiate or lobby for changes while they're complying with requirements they may find distasteful? Business can have an impact beyond just the obvious ones of providing a service. There is no power like economic power. Look at the impact businesses pulling out of South Africa had on apartheid.

Today China asks Microsoft to help ban certain words in file headers only. What if tomorrow it decides to extend that censorship to file contents? Or asks for archived records of some dissident's Web travels? Or the Web addresses of all unregistered users of the portal? How far will Microsoft go?

The company has gained a business foothold for now, but tomorrow, if the Chinese people find themselves free to decide where they want to go today, will they view Microsoft appreciatively as the company that helped open the door to the Internet and new ideas or suspiciously as an agent in the Chinese government's efforts to keep that door only partially open? No one can know, but it's something to think about.