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Chinese internet dilemmas - Updated

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George South | 13:54 UK time, Wednesday, 14 November 2007

(Published 3 Nov 2007)
The coming week will be an important one for internet giant Yahoo. It stands accused of helping the Chinese government to identify a reporter sentenced to 10 years in prison for leaking state secrets online.

Yahoo now face a lawsuit accusing them of 'aiding and abetting torture' as well as a US Congressional committee hearing at which CEO Jerry Yang is expected to face questions on the case.

China is an enticing prospect for internet firms. It's expected to overtake the US in the number of internet users by 2009. But the country's suppression of free speech and blocking of the internet is proving to be an ethical minefield for companies hoping to establish themselves there, such as Yahoo, Google and MSN.

Last month, a US Congress panel endorsed legislation to prevent American internet companies from cooperating with repressive regimes such as China. Meanwhile Yahoo (which no longer has a majority stake in Yahoo China after selling the firm to a Chinese company in 2005) says it's working "to develop a global code of conduct for operating in countries around the world, including China."

But what would an ethical code look like for companies operating in countries with such different levels of openness and free expression?

I spoke to Yan Sham-Shackleton, who writes Glutter, one of the most widely-read English-language blogs in China. She has first-hand experience of censorship, and says that foreign companies need to take responsibility for their actions in the country.

UPDATE 14/11: Yahoo has now settled this lawsuit out of court. Part of the deal is thought to include Yahoo agreeing to set up a fund to support other dissidents.

According to the NGO that brought the case, Yahoo decided to settle after the Congressional hearing last week, in which it was criticised as "at best inexcusably negligent" and at worst "deceptive" for not having given full details to the panel in their earlier probe into the jailing of Shi Tao.

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