Inside Story - Will Google quit China?

Google threatens to quit China saying it could no longer tolerate what it calls strict censorship there is this a case of a company putting ethics above business in a huge market and what are the potential costs of such a move this is inside story hello there and welcome to the program I'm Nick Clark so maybe www google. cn will be a thing of the past Google launched in China back in 2006 it did agree to some censorship as required by the Chinese government but now it's saying enough is enough as Tom Mecha reports Google says the attacks were an effort to learn the email passwords of several Chinese human rights activists it says the accounts of dozens of activists in China the US and Europe were being routinely accessed by Outsiders Google didn't State who was behind the attacks but said they had security and human rights implications for what it called the global debate about freedom of speech the California based company consulted the US state department before making its announcement in a statement Secretary of State Hillary Clinton said the allegations raised serious concerns we looked to the Chinese government for an explanation she said the ability to operate with confidence in cyberspace is critical in a modern society and economy until now Google has submitted to Chinese government censorship as required by Chinese law outside China a search for the term tianan square returns images and web pages about the 1989 protests and Massacre but the same search on the Google China site yields no mention of those events only pictures of a flag raising in some bicycles and web pages aimed at tourists visiting Beijing now the company says it's rethinking that strategy and that it's ready to pull out of China if it's not allowed to run an unsensed search by doing this today Google has Express the opinion of a lot of people on this kind of behavior this will influence not just China but the whole world the discussion on the right to privacy personal freedom in speech and tolerance of expression I think this is extremely important but analysts say China is unlikely to buckle to Google's demands it's impossible to imagine China backing down in any way as a result of Google making an announcement that it is leaving China from the point of view of the Chinese government there's much more important things than even a high-profile company such as Google but it will be very interesting to see what the reaction of the Chinese government is already we've seen that the Chinese government has asked many of the portals to downplay the news of Google's departure China has the potential to soon be the largest internet Market in the world Google's new China strategy could cost it billions of dollars that might go to Rivals who are prepared to submit to censorship Tom meta Al jaaz well let's look at this in detail now to kick things off let's hear from Google themselves we can speak right now to Peter Baron he's in London he's the director of communications and public affairs at the company uh welcome to the program MrBaron we appreciate your time now Google finds itself between the proverbial rock and a hard place on this one doesn't it well what happened actually was that that in December we we discovered we had uh been the target of a a very serious uh Cyber attack uh so uh we have decided that what we need to do is to to take a a new apprach roach to to China so when we went into to China in 2006 we we hoped that it was going to be possible to to open up the internet in that country uh but what has become very clear over the last year or so uh that there is a lot of efforts to clamp down on free freedom of speech uh on the internet in China and what we've seen in the last month with a very very serious and sophisticated attack as well as a a surveillance operation which has been targeting the the Gmail of uh of Chin Chinese human rights activists that leads us to conclude that that we can no longer agree to to censor our results in China so we're looking for a new approach so what will that new approach be are you going to pull out what we're going to do is uh in the coming weeks we'll be talking to the Chinese uh government Chinese authorities uh to see if it's possible to operate an an unfiltered search engine within the law in China now we accept that that may not be possible and if it's not possible uh we will close google. cn uh google.

com which is the the the version the worldwide Global version of uh of Google that of course will be available and available in Chinese what do you say to suggestions that you're just looking for ways of getting out of a market that you've been unable to conquer well I think that really is beside the point I mean we we in fact had our our best quarter uh ever in China in in in the last quarter of 2009 but in fact question of revenues is is really not material to this issue this issue is about freedom of speech and human rights don't you need China and in a sense doesn't China need you well we went into China in 2006 and we and we we saw opportunity there and hoped that it was going to be possible to to open up the internet uh in that country and at that time it was a controversial decision and and a very finely balanced judgment that we made but at that point we believe that that giving people greater access to information uh via search that the the benefits of that outweighed the D side of of having to agree to to self-censor our results but I'm afraid that circumstance has changed we we said when we went in that we would keep the situation under review if laws changed or the circumstances changed that we would reconsider our position so that's what we've done this week we're looking for a new approach uh to our position in China all right well easy to say with hindsight but uh you know you could say now you shouldn't have gone in in the first place and acceptance of Chinese censorship rules uh sets yourselves a very dangerous precedent didn't it well we went in we would certainly admit to being optimistic uh when we went in uh there was optimism optimism that it was going to be possible to to to open up the internet in in that country um uh we have been faced over the last year with the the reality of of what's going on and that hasn't just been Google that's that's a lot of other other internet companies as well whether it's Facebook or uh or or Twitter um there has been a a a very con concentrated clamp done on freedom of speech uh on the web in China over the last year and that has made life very difficult to operate there you said back in 2006 it would be more damaging for civil liberties for Google not to be in China at all doesn't the same apply right now this was a question of of balance our view at that point was that if we could give a much greater number of people in China access to information that that would be good for for democracy and good for access to information uh we we we tried that approach uh over over the last year uh is been very very difficult to to maintain that approach so uh as of this week we've decided that we we're no longer able to accept a situation in which we self- censor our results we're talking to the Chinese authorities we hope we can come to an accommod accommodation by which we can continue to to offer a an uncensored Service uh within the law in China if it isn't possible to do that then unfortunately we'll have to consider closing google. cn all right Peter Baron I know you have a very busy schedule right now we appreciate your time thanks very much okay so so now to our panel to discuss the all things Google in China in Hong Kong we have Thomas Tang who is president of the Institute of Management consultants in Hong Kong and in London Carson senson the senior Lector in information systems and Innovation at the London School of economics and political science and also in London we have Joe Glanville who's editor of the index on censorship welcome to you all uh Thomas T if I could start with you first of all how do you read this situation with Google in China are there motives genuine do you think it's difficult to say um I was listening to what MrBaron's explanation of the situation was just now and um um is as much as as a business motive as as the political drivers behind that I mean somewhere in between lies the truth um to be honest if you look at Google's figures I mean yes they are promising in that to that respect but um as a market where where they they see um huge growth Etc and having to comply with the regulations set down I mean they they obviously are looking at it very shrewdly and deciding whether they wish to continue doing business in this way Joe Glenville in London what do you make of suggestions that Google is using this as a smoke screen to cover up the fact that they haven't succeeded in becoming top dog in China I think it's a lot more complex than that and and I'm slightly baffled by people saying that Google's not doing so well in China because a 30% 31% share of the market seems pretty good to me and it's a very very bold move to to move out of the biggest Market in the world um to to sort of give up its Market in China is is a major thing to do so I think there are many different issues conflicting here the the whole sort of question of freedom of of speech and morality is one part of it it's probably not the whole story there's a bigger question around security and privacy which I think in the end might be the sort of key to the whole decision that Google has made um and then there's other questions around you know the big questions about how does a a company with with the ethical um ideals the the ideals of the First Amendment behind it operate in a country like China and that extends obviously across to other countries as well across the Middle East and in the rest of the world too okay well let me put that back to Thomas tang in Hong Kong uh 31% share of the market is pretty good and not something they would want to leave behind no I I I um I could see the professor Joe's Point um I think the point is that that first of all You' got to to um acknowledge that the actual internet Market in China is still quite small uh if you look at the number of access people that to have people have have access to computers and Technology it's still very limited in the population 1. 3 billion so 35% of that is not a huge Market I mean if you compare it to uh the overall size of the market that Google commands then you know it is sizable but not the most significant part of their business but let let me dwell on the point let me take up the point on the um uh the human rights issue that that Joe raised I mean basically we we are looking at a nation which is a very robust economy 8% growth over the last year and um part of that has come from the the kind of political uh uh doctrines that that have been put in place there the systems that have been put in place there which Ena the the government to rule uh with such stability now that's obviously open to to how people interpret it but uh frankly with with with a strong government in place uh Leading the People understandably they're nervous about uh when when companies like Google come in and insist on publishing uncensored data uncensored statements Etc um it it is it is something that they have to deal with caution so what they've said to Google is that please play by our rules you can do business here but please play by our rules okay well let's put that to to an expert in this field and that's caraston senson who's uh in London Mrsnson what do you make of MrT's comments well well I think the for me the most important part of this is of course the balance between the business concern and the more principal concerns and I really I think uh with a lot of commentators that's been in the media on this I I agree that this is not so much governed by the business concern because they they are making money and I think Google is a company known for for always going for the long punt so they they have extremely big Ambitions about wanting to change the world through computer code and as a computer scientist I I feel for that and I sympathize with it but I also see some of the inherent problems in that approach because when reality struck and the real world of politics is different from the world of computer code and I think the biggest problem here is of course that is the one that this is a battle of the cloud uh the computer cloud is what is Google's business and I think they are have always been quite wary of anybody who wants to tamper with that and I think the problem they have is they want to be seen around the world amongst all these other customers to really protect the the the indiv ual although there have been there still is issues all over the world with child pornography in the UK terrorism and all sorts of things but I think largely I think this is a way for them to put a foot down to say listen we we want to protect with what is our Prime Property namely the cloud and and I think this is uh this is a way to engage in that debate and I think it's also an example of a a new modern American company run by Alpha Geeks uh that is clashing with a very traditional uh ocracy in China that is used to having it it its own way so I think there's no way of for me to tell really how this is going to pan out in the long run but I would always aim at at at saying that that Google is always playing the long game okay so Joe G Glenville what do you say about the the Chinese government view that internet controls are necessary within the country well the thing is it goes to the core of of how the Chinese government rules and you know long before the internet came in there was total censorship and and propaganda in the way that newspapers were managed and we've just seen the same methodology if you like transferred to the internet but it's that much more sophisticated and it's that much more of a surveillance culture now because of the way that the internet operates um and it's it's what what there is is is if you like a a very sophisticated bureaucracy of censorship with thousands of officials internet police terms that can't be used list of terms that are all handed down to the people who operate the websites okay and um Google let me just let me just jump in there because we just want to get on to this point that there's around about 340 million Chinese people now online and and Google controls roughly as we've heard that 30 31% of the search Market second only to the Chinese search engine Buu who have 60% so we're just going to quickly examine who stands to gain if Google were to pull out of China B of course could eat up the Google share or maybe it could suffer a backlash because of its perceived alignment with the government that's debatable Yahoo number three in the market currently owns a 10% share Microsoft have a tiny share as well but they apparently consider China the most important strategic Market uh the Chinese internet portal such as 10cent netes and so who all with negligible market share they could also benefit uh MrTang what would you think would be the immediate benefit for other companies if Google were to pull out if if Google p pulled out uh there would be a void in the market and as you you said I mean BYU owns about 60% of the market share I mean they would clearly take advantage of that but I I don't believe that that they will completely monopolize the market I mean uh if a player pulls out other players will move in to to fill that void and there is a reason why um 40 40% of people have not chosen BYU um so really what it says is that there's a lot of entrepreneurs out there who will benefit from this um I don't to see it being such a bad thing if Google did pull out okay Carson soron can China afford to lose Google yes I I'm not an expert on China but I I don't see why they I I I don't see why they they couldn't I mean the point is that what has been widely reported in the media is that the other players are not signaling that they're going to follow suit so the so the point is it's going to work on the principle that somebody else will take over that market but what I've I mean I talked to one of our uh one of our doctor students and and who is Chinese and say there is a difference within in terms of usability that BYU is better for searching uh search better for search in Chinese but uh but Google is much better for advertisement so in terms of capitalizing on that gain uh on that possible Marketplace it might be questionable whether the others would be able to to capitalize on that or whether Google indeed has has been driving a market for the for themselves but it's obvious I think in that sense Google can less uh do without China than China can do without Google uh China has done fine without Google for 3,000 years I don't see why they wouldn't be able to last a bit longer but I think they want to be seen as wanting to have Google because it sends the right signals and when Hillary Clinton Waits into the debate it's clearly it's it's an it's an we are talking about here it's a global media issue it's very rare that technology issues are on a global media scale like this so it's obvious it is an extremely important issue but I think and I think in the long term Google will need the biggest Market in the world there's no doubt about it all right and Joe Glanville no doubt about it as as well that Yahoo and Microsoft will be watching this extremely closely and may have to make some delicate decisions themselves well I think what's going to be interesting about this is is this really going to change the way that Western um companies do business with China and and with regimes that are authoritarian regimes that are similar to China because um Google's really thrown down the gauntlet and in terms of questions of of social responsibility corporate responsibility things might really shift now particularly if the American government comes in very heavily behind Google asking difficult questions of the Chinese government as Hillary Clinton is already doing does that mean that Yahoo and Microsoft are actually going to really damage their credibility worldwide if they carry on and leap in in a very opportunistic cynical way yeah Mrson no doubt the Chinese government would want to encourage uh internet Savvy technologically advanced companies like Google in that sense it could be a loss yeah well I think think that what I think I mean again I'm not an expert on China but i' I I've lived almost 50 years and I have understood so much that they really want to do things their their own way and I think the problem here the conflict here is of course partly caused by the fact that I think Google as a company is used to doing technology it's not it is not used to doing politics if you look at the all the issues that has been about them scanning books and the rights and all of those it have shown that they are extremely clever technology company but they are still maturing as a company in terms of understanding politics and all the global issues so they have they have been able to position themselves globally but now when you play politics you don't do it as as fast a pce as when you do technology and I think politics and diplomacy and all of that that takes centuries and I think they have uh they they have especially maybe because of their historical background with one of the founders uh being from the old Soviet Union they have of course very strong opinions and it has really been a problem for them to accept this uh this deal with China the past four years but really I really think the point here is that you can't just fix these things overnight although of course others have pointed out that China has in many ways in other cases overplayed their hand and have been left weak because of it uh in the Ft it was reported for example in the trade with with steel prices and and arms deals with Taiwan that that one analyst argued that that Google oh sorry that China had tried to too hard-handed to control things and therefore had potentially lost out on and that could be the case in this as well but it's abs absolutely obvious at the end of the day uh there's one customer to Google in China and that is the Chinese State and if it wants a business there it needs to deal with this one customer in a sense Joe Glanville could might Google not look back at their decision in 2006 to set up their operations in China and wonder whether it wasn't a mistake or not because really this kind of thing was inevitable wasn't it I think obviously some kind of clash of some kind was going to be inevitable and I think they said at the time that they were circumspect and they they they massively damaged their credibility in terms of their their motto don't be evil in terms of their of their moral responsibility by going into China it was always a gamble it was always going to be a risk and this is a massive risk too what they're doing it's a very very bold decision to pull out of China if if they pull out of China but I can't see that the Chinese government are going to agree to their proposal of of having unfiltered search engine so how do you see it panning out then do you think that Google will actually leave I think they I I think that they will ultimately probably have to leave yes but I think what might come out of this is is some some very interesting um changes in terms of protecting security and privacy because that is what one of the most important issues that this comes down to in the end if they are so worried about their dissident Gmail being targeted um Gmail users many of whom are human rights activists then they're really going to have to do something to build confidence in in Gmail again so if Google does elect to be uh the fool Guy Mrsnson what impact do you think it might have for other search engines within the country well I mean it's obvious if it turns out in I'm I'm less confident that Google will pull out but uh but if they indeed pull out it's obvious that the the light will shine even harder on the other remaining ones except maybe the local Chinese one uh to to really so what is your stance on this and if you look at the that is I think probably one of the big differences between Microsoft and Google uh is that that Google is still more principled whereas Microsoft is is more business-minded and I think it's obvious that the new Bing search engine is is is a is a solution uh desperately looking for a problem uh so they are desperately trying to push this as a as a valid competitor to Google search engine and it's and it's obvious that they would probably uh get some Traction in the market because they are inherently pragmatic I think as an organization in search of a positive note Joe Glanville do you think in a sense that this may lead to uh the Chinese people one day having unfettered access unfiltered access to all the world's information let's hope I mean I I think we're a long way from there but I I think what this will do as as I said earlier is put pressure on Western companies in in how they do business in China and I do think it's it's going to be very very bad PR for China if Google pull out I mean Google May in the end need China more but it's going to look very very bad for China and we've seen pictures of Chinese laying reads on on on Google um at Google's offices um the the Chinese are going to miss Google they're not going to be happy about it at all so I I think in a way that by not cooperating with the Chinese government in that way we might see um a censorship free China much more quickly all right well that's all we got time for Joe Glenville we appreciate your time so to kaston saon thanks very much indeed and we also thank Thomas Tang a lot too but we lost a satellite connection to Hong Kong but we thank him very much for his contribution please drop us a line if you have any thoughts or comments about the issues raised on this program insid story at Al jazeera.