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The UK Parliamentary Foreign Affairs Committee recently issused a report in which it stated that "search engines' agreement to block the access of computer users to certain information (in China) was 'morally unacceptable'".

Moreover, it called on the UK government "to put pressure on China's political leaders to relax its curbs and allow services to be unrestricted."

These are strong words with very little likelihood of achieving any direct results.

The current UK government takes very little notice of reports from its Parliamentary committees. The UK government has very little influence, if any, over the Chinese Government. Thirdly, the internet companies which operate in China persist with platitudinous comments from their corporate communications units phrases:

"It is better to offer China users some information rather than none..."

"We have to respect and obey the laws of the countries in which we operate, if we wish to conduct business there..."

Google, Yahoo! and Microsoft, owner of MSN Search, have all shown a willingness to compromise with the authorities.

Yahoo! provided information which contributed to evidence that helped to jail a dissident for 10 years, after he used a Yahoo! email to relay the contents of a secret government order. Microsoft has closed down a political blogger's site, arguing that he had failed to comply with local laws. Seeking to avert these types of dispute, Google has not introduced a version of its email or blog software.

There was a theory that the internet could never be censored - at least without substantial technical effort and willingness of the internet companies to accede to Governmental political pressures. The Chinese Government has succeeded, at least for now. China's economic power is such that Governments worldwide are very unlikely to exercise any legal boycotts on the conduct of commercial activity with that country.

Unfortunately, the commercial reality is that the Chinese market is too large to ignore. Google is simply the latest internet company to conclude that the world's most populous country is too important a market. It has accepted local censorship requirements that have already been endorsed by both Yahoo! and Microsoft.

Time Warner, the media group, is one of the few companies to have walked away from China. In 2002 it abandoned a planned internet joint venture in the country because of concerns that local authorities would want to access private email accounts.

Google says that it is important to engage with China, even in a restricted form: "Providing no information, or a heavily degraded user experience that amounts to no information, is...inconsistent with our vision."

Censorship undermines integrity. However, it should be noted that China is by no means the only country to operate censorship. Iran is a keen censor of Western material, particularly material that it believes will corrupt its female population. In Germany, searches on Nazi-related topics were already blocked; in America, copyright infringement was carefully policed.

Are these restrictions as dramatic as the political censorship which search engines have accepted on their results in China? It depends on an individual's scale of values.

So far, "their contributions to censorship" do not seem to have harmed the reputation of the world's most popular search engines - although it is not always clear whether users of its search engine were aware of the censorship that the company has imposed. However, such compromises could affect the image of the company.

More importantly, perhaps, the growth in the notion and attributes of Socially Responsible Investment as a criteria which both institutional and retail investors must satisfy may enable investors to exercise shareholder power over the actions of the executive management of the companies - surely the most effective pressure?

Copyright © 2006, IT-Analysis.com

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