Yahoo gets Chinese grilling

For most companies with international ambitions, China represents a tantalising prospect – after all, cracking such a huge market could pay huge dividends. But this week’s very public castigation of Yahoo boss Jerry Yang for his company’s role in the 2004 jailing of Chinese reporter Shi Tao highlights how tough it is for western companies to do business there.

Yahoo was fiercely attacked in the US Congress this week for supplying confidential information to the Chinese secret police that led to the arrest of human rights activist Shi Tao, who was later given a ten year jail sentence for his subversive pro-democracy activities. Politicians from both sides of the House put the boot in, with Democrat Tom Lantos supplying the most memorable sound-bites: ‘While technologically and financially you are giants, morally you are Pygmies,’ he sneered, suggesting the company was ‘spineless and irresponsible’.

The politicians weren’t just upset about Yahoo giving up details about Shi Tao’s online activities (which was then used by the police to convict him). They also think that Yahoo subsequently lied to Congress about it. In an earlier hearing, general counsel Michael Callahan had denied all knowledge of why the information had been requested – but it later came to light that this was not entirely true. Callahan insists he didn’t know all the facts, but Lantos said this was at best ‘inexcusably negligent’, and at worst ‘deliberately deceptive’.

Yahoo was contrite (to an extent), apologising for the confusion and for the suffering endured by Shi Tao’s family, and expressing the wish that it can avoid such situations in future.

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