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The Price of Yahoo! Sale to China- Free Expression ?

Posted by Author on October 26, 2011

Yahoo, the most visited web portal in the United States, appears to be shopping for a parent company. Jack Ma, the Chairman of Alibaba Group Holding Ltd., China’s largest e-commerce company, has recently said that he is “very interested” in acquiring the U.S.-based company. Such a shake-up may be just what Yahoo is looking for as a means of reviving growth within the company, but it also raises some significant concerns over the maintenance of Yahoo’s human rights obligations as a major repository and purveyor of information on the internet and an early cautionary example of the challenges companies face when pressed by governments to provide sensitive user information.

Seven years ago, at the Chinese government’s request, Yahoo’s Hong Kong office turned over information that led to the imprisonment of  journalist Shi Tao. Yahoo sought to make amends in various ways, including adopting internal policies and joining with other internet service providers and stakeholders to promote a common, rights-based approach to government demands. Human Rights First urges that any potential  Yahoo suitor commit to upholding Yahoo’s existing policies, and its commitments as a member of the Global Network Initiative, as a starting point.

The specter of any Chinese company buying Yahoo, with all of its emailing, instant messaging, and information dispersing capacities, raises additional red flags. The Chinese government has become notorious for its censorship of online content that it deems dangerous to the stability of its regime, including calls for human rights and democratic reforms. More worrisome in the context of a Yahoo buyout, though, is the Chinese government’s use of the internet as a tool for covertly tracking—and often punishing—citizens who post such “dangerous” ideas on the web.

In 2010 alone, the Chinese government was implicated (though allegations were not definitively proven) in at least two separate incidents in which American web service providers were used to obtain the private information of enemies of the Communist Party:

In April 2010, the Information Warfare Monitor and the Shadow Server Foundation released a detailed report, “Shadows in the Cloud,” describing an elaborate computer exploitation campaign in which primarily Indian government and media groups were targeted and sensitive files were stolen. Computers in at least 35 countries, including the US, were compromised. Given the sophistication of the attack, the nature of the victims and the information obtained, the investigative report found that it is most likely that the Chinese government was the culprit. The attackers used web services such as Yahoo email accounts, Twitter, and Google Groups, because attackers can easily set up accounts with these free websites. Then, traffic between the computers of attacker and the victim appears innocuous to firewalls and network administrators.
In early 2010, Google reported an attack on its corporate infrastructure originating from China. The ensuing investigation suggested that a “primary goal of the attackers was accessing the [Google email] accounts of Chinese human rights activists.” Google’s initial report on the incident did not specifically identify the Chinese government as the responsible party, but it strongly implied that belief by referring users to a number of reports chronicling the government’s role in advanced computer exploitation schemes. Other firms involved in the investigation asserted unequivocally that the Internet Protocol addresses and servers used to carry out the attack were directly traceable to the Chinese state or its proxies.

These attacks show that Beijing has no hesitation in targeting American web service providers to accomplish its censorship goals. Yahoo has been a victim in the past and, no matter who purchases the company, may be vulnerable in the future. But the specter of Chinese corporate ownership heightens these concerns,  because the Chinese entity will be more inclined to acquiesce to unlawful use by its government or because they may be less inclined to investigate breaches that likely originated from its government.

There is already evidence that Alibaba is willing to quietly acquiesce to government demands. In August, Taobao.com, a Alibaba’s Chinese equivalent of eBay, banned the sale of software that can be used to bypass internet censorship. There is no official ban on such software in China, but John Spelich, Alibaba’s vice president of international corporate affairs, said that the company decided that such sales were “a business that we probably should not be in.” He added that he is “not aware of anybody [i.e. the government] asking us to stop.”  Commentators, however, largely believe that the ban has Beijing’s fingerprints all over it, particularly given the recent crackdown on subversive information that have resulted from government fears of a popular uprising akin to the recent Arab Spring.

Beijing may in fact be looking forward to the opportunities that Alibaba’s ownership of Yahoo could bring. In an April 2010 speech, Wang Chen of the State Council Information Office noted the increasing difficulty of “supervision” as internet technology moves forward. He then addressed cloud computing, which is the latest in information storing technology that allows an internet user to store all of their most important information—address book, social networking accounts, banking information, photos, email, and more—in a virtual “cloud” that can be accessed from electronic device connected to the internet, as opposed to having such information stored physically on one or more computers. In a portion of his speech that was redacted from the version posted online, Mr. Chen said “[w]hoever seizes that cloud will control the future.” Also redacted was his list of firms that he knows to have conducted extensive research in cloud computing, including IBM, Google, and Yahoo.

Yahoo is a powerful force in the world of online expression. Whichever company comes to control that force—be it Alibaba or any others—American policymakers and the world public must take steps to ensure that Yahoo maintains and expands its commitment to free expression and privacy online.

Human Rights First

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