Fresh Outrage at Yahoo Ahead of China Hearings

By Joel Rothstein and Eric Auchard

U.S. Internet companies faced fresh bipartisan criticism in the Congress on Thursday following heightened controversy over Yahoo Inc.'s alleged role in the Chinese government's eight-year prison sentence against a second dissident.

"I don't like any American company ratting out a citizen for speaking out against their government," Rep. Tim Ryan, an Ohio Democrat and member of the House Human Rights Subcommittee, told Reuters on Thursday.

"This is the tip of the iceberg of a very oppressive regime that we have almost become accustomed to America," Rep. Chris Smith, a Republican and chairman of the House Human Rights Subcommittee, told Reuters.

The storm over Western media companies' compliance with China's policies comes before next week's hearing by Smith's committee where 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 Chinese government pressure 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 Linda Osaka 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 the imprisonment of writer Li Zhi in 2003.

"The choice in China and other countries is not whether to comply with local laws. The choice is whether to remain in the country or not," Osaka said. "We have a philosophy of engagement. We believe the Internet is a positive force."

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

Alibaba has moved all of its 2,000 Yahoo China servers from the United States 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 Justice Department can force the Web search company to turn over data about its customers' Web-surfing habits. The information is sought by the government to defend a law to prevent online child pornography.

Smith said the hearings set for February 15 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," she said.

"Congress remains very concerned with the Chinese pressure on Internet companies to help in Beijing's continuing crackdown on free speech," said Rep. Tom Lantos (news, bio, voting record), 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 whose 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."

Copyright 2006 Reuters Limited.

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Joel Rothstein & Eric Auchard
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