Annex 2
TESTIMONY OF MICHAEL CALLAHAN
Senior Vice President and General Counsel, Yahoo!
Inc. before the Subcommittees on Africa, Global Human Rights and
International Operations, and Asia and the Pacific
February 15, 2006
Chairmen Smith and Leach, Ranking Members Payne
and Faleomavaega, and Members of the subcommittees, I am Michael
Callahan, Senior Vice President, General Counsel and Secretary
of Yahoo! Inc. Thank you very much for the opportunity to testify
before you today.
I would like to make three fundamental points
here today:
First, our principles. Since our founding in
1995, Yahoo! has been guided by beliefs deeply held by our founders
and sustained by our employees. We believe the Internet can positively
transform lives, societies, and economies. We believe the Internet
is built on openness. We are committed to providing individuals
with easy access to information. These beliefs apply in the United
States. These beliefs also apply in China, where the Internet
has grown exponentially over the past few years and has expanded
opportunities for access to communications, commerce, and independent
sources of information for more than 110 million Chinese citizens.
Second, the Shi Tao case. I will discuss this
in more detail later in my testimony. The facts of the Shi Tao
case are distressing to our company, our employees, and our leadership.
Let me state our view clearly and without equivocation: we condemn
punishment of any activity internationally recognized as free
expression, whether that punishment takes place in China or anywhere
else in the world. We have made our views clearly known to the
Chinese government.
Third, this hearing. We commend you, Mr Chairmen,
for holding this hearing. It allows these issues to be raised
in a public forum and provides an opportunity for companies such
as those appearing here today to ask for the assistance of the
US government to help us address these critical issues. While
we absolutely believe companies have a responsibility to identify
appropriate practices in each market in which they do business,
we also think there is a vital role for government-to-government
discussion of the larger issues involved.
These issues are larger than any one company,
or any one industry. We all face the same struggle between American
values and the laws we must obey. Yahoo! intends to be a leader
in the discussion between US companies and the US government.
We appeal to the US government to do all it can to help us provide
beneficial services to Chinese citizens lawfully and in a way
consistent with our shared values.
The Impact of the Internet In China
Before discussing these issues in detail, allow
me to clarify Yahoo!'s current role in China. In October 2005,
Yahoo! formed a long-term strategic partnership in China with
Alibaba.com, a Chinese company. Under the agreements, Yahoo! merged
our Yahoo! China business with Alibaba.com.
It is very important to note that Alibaba.com
is the owner of the Yahoo! China businesses, and that as a strategic
partner and investor, Yahoo!, which holds one of the four Alibaba.com
board seats, does not have day-to-day operational control over
the Yahoo! China division of Alibaba.com. The Alibaba.com management
team runs the business; however, as a large equity investor, we
have made clear our desire that Alibaba.com continue to apply
rigorous standards in response to government demands for information
about its users. I have personally discussed our views with senior
management of Alibaba.com, as have other senior executives of
Yahoo!
Mr. Chairmen, we believe information is power.
We also believe the Internet is a positive force in China. It
has revolutionalized information access, helps create more open
societies, and helps accelerate the gradual evolution toward a
more outward-looking Chinese society.
The Internet has grown exponentially in China
in ways that have increased China's openness to the outside world.
More than 110 million people in China use the Internet. A growing
Chinese middle class is benefiting from improved communication,
technology, and independent sources of information. Online search,
a core Yahoo! China service, is used by 87% of the online population
in China, with more than 400 million search queries taking place
every day. This represents an increase of almost 1,600% over just
the last three years. Unlike virtually any medium that has preceded
it, the Internet allows users to access the information they want
when they want it.
The number of people communicating with each
other over the Internet has also increased dramatically. The number
of active mailboxes has grown by 88% to 166 million, and those
using instant messaging has risen to 87 million, doubling in just
three years.
Let me give you a couple of examples of the
power of the Internet in China. In November 2002, a new respiratory
illness developed in southern China. This illness spread to other
areas of China and in Asia. Initially, state media did not report
widely on the outbreak, limiting access to information on SARS
in China. However, word spread quickly through channels on the
Internet, alerting people in China and around the world of the
severity of the epidemic. The Internet forced the Chinese government
to be more transparent and to vigorously attack the problem.
Another example is currently highlighted on
the Human Rights Watch website. Human Rights Watch, with which
we have consulted on these issues, tells the compelling story
of how the Internet helped spread the word in China about the
tragic death of a young college graduate named Sun Zhigang while
in police custody. A storm of online protests led to the abolition
of the law used to detain Mr. Sun. Human Rights Watch's website
states, "[t]he Sun Zhigang case showed how Internet activists
and journalists could mobilize an online uprising that produced
real change."[87]
Experts in China and the United States agree
on the liberalizing impact of the Internet in China. Please note
the comments of a Chinese Academy of Social Sciences researcher
in the New York Times last week. This expert stated, "At
first, people might have thought it [the Internet] would be as
easy to control as traditional media, but now they realize that's
not the case."[88]
Finally, I would commend to you a 2002 report
by the well-respected RAND Corporation that made an even bolder
conclusion. It concluded that the Internet has allowed dissidents
on the mainland to communicate with each other with greater ease
and rapidity than ever before.[89]
But even with these extraordinary benefits,
there are severe challenges for any company operating in China,
and particularly for those in the Internet, media, or telecommunications
industries. This Committee correctly highlights the fundamental
conflict between the extraordinary powers of the Internet to expand
opportunities for communication and access to information with
the obligations of companies doing business in China to comply
with laws that may have consequences inconsistent with our values.
This brings us to the case of Shi Tao.
The Facts Surrounding the Shi Tao Case
The Shi Tao case raises profound and troubling
questions about basic human rights. Nevertheless, it is important
to lay out the facts. When Yahoo! China in Beijing was required
to provide information about the user, who we later learned was
Shi Tao, we had no information about the nature of the investigation.
Indeed, we were unaware of the particular facts surrounding the
case until the news story emerged. Law enforcement agencies in
China, the United States, and elsewhere typically do not explain
to information technology companies or other businesses why they
demand specific information regarding certain individuals. In
many cases, Yahoo! does not know the real identity of individuals
for whom governments request information, as very often our users
subscribe to our services without using their real names.
At the time the demand was made for information
in this case, Yahoo! China was legally obligated to comply with
the requirements of Chinese law enforcement. When we had operational
control of Yahoo! China, we took steps to make clear our Beijing
operation would honor such instructions only if they came through
authorized law enforcement officers and only if the demand for
information met rigorous standards establishing the legal validity
of the demand. When we receive a demand from law enforcement authorized
under the law of the country in which we operate, we must comply.
This is a real example of why this issue is bigger than any one
company and any one industry. All companies must respond in the
same way. When a foreign telecommunications company operating
in the United States receives an order from US law enforcement,
it must comply. Failure to comply in China could have subjected
Yahoo! China and its employees to criminal charges, including
imprisonment. Ultimately, US companies in China face a choice:
comply with Chinese law, or leave. Let me take this opportunity
to correct inaccurate reports that Yahoo! Hong Kong gave information
to the Chinese government. This is absolutely untrue. Yahoo! Hong
Kong was not involved in any disclosure of information about Mr.
Shi to the Chinese government. In this case, the Chinese government
ordered Yahoo! China to provide user information, and Yahoo! China
complied with Chinese law. To be clear—Yahoo! China and
Yahoo! Hong Kong have always operated independently of one another.
There was not then, nor is there today, any exchange of user information
between Yahoo! Hong Kong and Yahoo! China.
Next Steps
Yahoo! continues to believe the continued presence
and growth of the Internet in China empowers its citizens and
will help advance Chinese society. The alternative would be for
these services to leave China—a move we believe would impede
Chinese citizens' ability to communicate and access independent
sources of information. But we recognize this cannot be a time
for business as usual. As part of our ongoing commitment to preserving
the open availability of the Internet around the world, we are
committing to the following:
— Collective Action: We will
work with industry, government, academia and NGOs to explore policies
to guide industry practices in countries where content is treated
more restrictively than in the United States and to promote the
principles of freedom of speech and expression.
— Compliance Practices: We will
continue to employ rigorous procedural protections under applicable
laws in response to government requests for information, maintaining
our commitment to user privacy and compliance with the law.
— Information Restrictions:
Where a government requests that we restrict search results, we
will do so if required by applicable law and only in a way that
impacts the results as narrowly as possible. If we are required
to restrict search results, we will strive to achieve maximum
transparency to the user.
— Government Engagement: We
will actively engage in ongoing policy dialogue with governments
with respect to the nature of the Internet and the free flow of
information. Let me make one final comment about the role of the
US government. We urge the US government to take a leadership
role on a government-to-government basis. The Internet industry
in the United States, including the companies appearing before
you today, have changed the way the world communicates, searches
for, discovers, and shares information. No other medium in history
has the potential to effect such great change so rapidly. We operate
businesses that transcend boundaries, in a world of countries
and borders. The strength of this industry and the power of our
user base is formidable to be sure. But, we cannot do it alone.
We will do everything we can to advance these principles. Ultimately,
the greatest leverage lies with the US government.
Chairmen Smith and Leach, Ranking Members Payne
and Faleomavaega, and Members of the subcommittees, thank you
for giving me the opportunity to appear before you. We welcome
this chance to have a frank and open dialogue about this important
issue. We are grateful for your willingness to understand the
difficult challenges we face, and to help us as we work together
to protect the ability of the citizens of the world to access
communication, commerce, and independent sources of information.
I would be happy to answer your questions.
87 Human Rights Watch, "Chinese Protest Online:
The Case of Sun Zhigang," located at http://www.hrw.org/campaigns/china/beijing08/voices.htm. Back
88
Howard W. French, "Despite Web Crackdown, Prevailing Winds
Are Free," New York Times, 9 February 2006. Back
89
Michael S Chase and James C Mulvenon, You've Got Dissent!
Chinese Dissident Use of the Internet and Beijing's Counter-Strategies,
RAND Corporation monograph, 2002, page 3. Back
|
