Fresh U.S. outrage ahead of China Internet hearings

'The bloom is off the rose for the Internet industry,' says one analyst

U.S. Internet companies faced bipartisan criticism in Congress yesterday amid a rising controversy over Yahoo Inc.'s alleged role in the Chinese government's imprisonment of a second dissident.

"I don't like any American company ratting out a citizen for speaking out against their government," said U.S. Rep. Tim Ryan (D-Ohio), who is a member of the House human rights subcommittee.

"This is the tip of the iceberg of a very oppressive regime that we have almost become accustomed to in America," said Rep. Chris Smith (R-N.J.), the subcommittee's chairman.

The storm over Western media companies' compliance with Chinese policies comes before a hearing next week by Smith's committee. Lawmakers from both parties are expected to grill representatives from Yahoo, Google Inc., Microsoft Corp. and Cisco Systems Inc.

"There are probably others [dissidents] that we need to find out about. We are going to make sure it doesn't get swept under the rug," Smith said.

Google came under fire last month for bowing to pressure from the Chinese government to block politically sensitive terms on its new Chinese site. Microsoft has also angered human rights activists by blocking the blog of a critic of the Beijing government.

Yahoo spokeswoman Mary Osako said her company was unaware of the details of the latest case raised by Paris-based international rights group Reporters Without Borders. The group said Yahoo provided electronic records to Chinese authorities that led to an eight-year prison sentence for writer Li Zhi in 2003.

"All U.S. and international firms operating in China face the same dilemma of complying with laws that lack transparency and that can have disturbing consequences inconsistent with our own beliefs," Osako said.

In September, Yahoo was accused of helping Chinese authorities identify Shi Tao, who was charged with leaking state secrets abroad and sentenced last April to 10 years in prison.

Yahoo's engagement includes a $1 billion investment last year to acquire a 40% stake in Chinese e-commerce company, which now runs Yahoo's China operations.

Alibaba has moved all of its 2,000 Yahoo China servers from the U.S. to China, Alibaba's CEO said last year.

Smith, one of the harshest China critics in Congress, said he wants legislation requiring companies to pull operations such as e-mail servers out of China and other countries that lack U.S.-style civil rights and due process protections.

Google is already engaged in a legal battle with the Bush administration over whether the Department of Justice can force the Web search company to turn over data about its customers' Web-surfing habits. The government is seeking such information to enforce a law against online child pornography.

Smith said the hearings set for Wednesday will push Yahoo to reveal what information it provided to the Chinese government, the number of people involved and details on how Yahoo interacts with what he describes as the "secret police."

"We only responded with what we were legally compelled to provide and nothing more," Osako said. "We had a vigorous process in place to make sure that only required material was provided."

"Congress remains very concerned with the Chinese pressure on Internet companies to help in Beijing's continuing crackdown on free speech," said U.S. Rep. Tom Lantos, the founding co-chairman of the Congressional Human Rights Caucus.

"We are looking into ways in which the companies can resist or circumvent this pressure, and this will be Topic A at our hearing next week," said Lantos, the ranking Democrat on the House International Relations Committee. His district includes the northern edge of Silicon Valley.

"The bloom is off the rose for the Internet industry," said John Palfrey, director of an Internet think tank at Harvard Law School. "There is a sense that American companies have a higher obligation than has been practiced in China in recent years."

This story, "Fresh U.S. outrage ahead of China Internet hearings" was originally published by Reuters.

Copyright © 2006 IDG Communications, Inc.

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