The verdict is in.
In the court of public opinion, Google is guilty/innocent of disrespecting-the-laws-of-a-sovereign-nation-in-which-it-does-business/standing-up-for-its-principles.
It is a paragon of/typical example of an ethical-enterprise-at-its-best/corporate-arrogance-at-its-worst.
Read the comments following various blogosphere commentaries on Google’s decision to stop censoring its Chinese search engine and mostly you’ll discover ethics is a popular spectator sport.
When it’s someone else’s ethical conundrum, solutions are always easy and violators are always reprehensible. Ethics is always simpler when you’re in the bleachers than on the field playing the game, though.
Consider the case of Google. Legally, it’s probably in the clear for the moment. It has no legal obligation to host its Chinese-language search in mainland China. At the moment, Hong Kong’s laws do not require censorship in spite of China’s sovereignty over it; China is free to block access to Google at its borders.
And, while the evidence is strong that agents of the Chinese government have tried to hack Google’s servers, the company has no meaningful legal recourse, unless you think suing the Chinese government in a Chinese court would do any good.
As a publicly held company, Google’s management must act in the best interests of its shareholders. On the face of it, failing to conduct business in the world’s fastest growing economy would have been a questionable choice … Google probably had to make the attempt, and, having made the attempt, did have an obligation to obey the laws of the land whether or not its managers agreed with them.
On the other side of that coin: Google’s search algorithms are just that … algorithms. The Chinese government’s censorship rules don’t work that way — they are idiosyncratic. Which means obeying Chinese censorship laws would require technological fiddling of the kludgiest kind.
Then there’s Google’s international brand, which depends on it providing honest answers to the questions that are searches. Allow censorship anywhere and the honesty of its search results are questionable everywhere.
So while it’s easy to second-guess Google’s decisions, making those decisions was a much more difficult proposition, balancing as they did a complex collection of fiduciary, legal, and ethical concerns.
Now let’s get out of the bleachers and onto the playing field.
More and more companies that are putatively based in democratic nations but are pleased to call themselves “multinational” have subsidiaries, partnerships, suppliers and customers located in less-than-democratic countries. China is the most prominent, but hardly alone.
Even companies that aren’t multinationals employ citizens of those countries — here in the United States they’re legally resident under H-1B visas.
Imagine your company is among them. You learn the Chinese government is requiring your Chinese subsidiary to covertly gather information about an H-1B employee, or an employee of that subsidiary, or an employee of a trading partner or customer. You are instructed to provide regular downloads of all e-mails sent or received by that individual.
The good news: From your perspective the legal situation is clear. Namely, it is whatever your company’s general counsel says it is. Unless you own the company you have no legal discretion in the matter.
Other than that, nothing at all is clear. The individual in question might have received trade secrets; providing them to the Chinese government could easily mean you’re donating them to Chinese competitors.
Your colleague might be a Chinese dissident, engaged in activities that are perfectly legal and normal in a free society. Complying with the request means helping consign a colleague — someone you know, like and admire — to the extended hospitality of a Chinese prison warden.
Or, the individual might belong in jail: Not all dissidents of totalitarian regimes are admirable people. Even that is morally gray: Most of those who have successfully overthrown totalitarian regimes have been considerably less admirable than our own founders.
The world is, in Tom Friedman’s now clichéd formulation, flat, or at least flattening. Trading and communications networks make this part of our daily existence.
But that’s the economic perspective. The world of values is anything but flat. It’s convoluted, and seems determined to stay that way.
Long-time readers of Keep the Joint Running know my dislike for the simplistic formulation, “do the right thing.” Occasionally, the “right thing” is actually clear and simple. More often it’s damned complicated, especially when you’re in a leadership role.
An example you’ll be facing with increasing frequency is finding the laws of a foreign nation to be both beyond what you personally find to be morally acceptable, and contractually binding.
The world’s trading systems are globally intertwined, but its moral systems are not, making Google’s “You can make money without doing evil” far easier to say than to turn into useful guidance.
I would have thought the old business cannard of “…a corporation’s only ethical responsibility is to increase the wealth of its shareholders…” had been recently voided by the Supreme Court© (brought to you by Halliburton) and its insistence that corporations enjoy all the rights and priveledges of a corporeal human (e.g.: Free Speech, Free Association, etc.) – no?
I believe what caused Google to break with China wasn’t the “ethics” of obeying Chinese law. What caused Google to break with China was the targeted theft of Google IP by Chinese IT thieves. When the algorithms that are at the core of your business, your company’s “crown jewels” are stolen by people who code in Chinese with Chinese destination IP addresses, and the Chinese government denies the theft, what are one’s options? Do you continue to play ball while the Chinese set up a Google clone and gradually eliminate you from the Chinese market, or do you decide not to play in the rigged “game”? Google’s playground is the entire globe. Sure, they’ll lose some revenue, but not as much as they’ll lose, if they lose all of their Intellectual Property to Chinese crooks and companies. Leaving China for ethical reasons looks a lot better than leaving China with your tail between your legs looking like a fool who got robbed by his betters. Google is supposed to be a smart, savvy company, but their software repositories and source code were easily plundered last December. The Chinese did something to Google that Microsoft couldn’t do – steal their source code. Google left China out of self defense. They really had no choice. They’d have been bigger fools to stay and play in a crooked game.
The most interesting piece of information that I have read about this whole affair is that the Chinese government may have actually hinted to Google that the Hong Kong move was the preferred solution.
Sergei said this recently in an interview in the WSJ. Google and China both save face. Google gets to drop the self-censorship. China can posture about running Google out of the country.
What are the ethics of this situation? It looks to be by far the most practical solution. Everybody wins.
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(from my friend Bill)
Good analysis of the issues. However, Lewis does what many consultants do. He wants to solve the global issue before the specific problem facing Google in China which is the different ethical/political expectations in China. It doesn’t seem to me to be different from any other multinational company selling productgs/services in China. We have laws on the subject and so does China. If one wants to do business in China you accept their ethical standards and you respect their political system. If that can’t be done, then Google and any other company can’t do business there at this time.
But don’t try to solve the global issue in a vacuum. If Google wants to make a separate issue of the different ethical standard they should take the matter to an appropriate “international court or other arbitration body,” as distasteful as that may be.
Just because Google has a great business opportunity does not satisfy the “informed buyer & informed seller” restraint.