Written evidence submitted by Microsoft
Microsoft welcomes the opportunity to address
issues surrounding Internet-based services in China before the
Foreign Affairs Committee. Microsoft believes that issues of Internet
content and customer security go to the heart of our values as
a company. The Internet should be fostered and protected as a
worldwide vehicle for reliable information and communications,
personal expression, innovation and economic development. Microsoft
seeks to advance that objective by providing services such as
our free Hotmail email service, and free personal websites or
"blogs" on the MSN Spaces service, as well as reliable
access through the MSN portal to the millions of websites that
have made the Internet such a magnet for education, commerce,
entertainment, and, increasingly, for personal communications
and expression. Microsoft is therefore deeply concerned about
recent events that have prompted widespread public attention to
issues of individual security and government control of Internet
content in that country. We are actively seeking ways of maximising
the availability of information and opinion through these services
while reducing the risks to individual users.
Global dimensions
At the same time, the Internet raises issues
that often justify government attention, especially on matters
of individual privacy, law enforcement, and national security.
On some of these issues, governments around the world have made
differing judgments about the legal standards and policy trade-offs
appropriate to their own cultures and national circumstances—in
many cases issuing regulations or codes of conduct that define
limits on permissible content and prescribe procedures for identifying
authorship. While the exercise of governmental responsibilities
is usually well-intentioned and limited, it is critically important
for the future of the Internet—and thereby for the future
of the global community and economy as a whole—that all
governments address these issues with deliberation and restraint.
Legal and regulatory steps should be taken only with the utmost
attention to their wider consequences—including the impact
on individuals, enterprises and societies far beyond the borders
of the initiating countries. International meetings and bilateral
consultations may increasingly help to promote the consistency
of national actions and to maximise the openness, security and
reliability of the Internet platform. Indeed, the greatest influence
over time on national policies affecting the Internet, including
those of the Chinese government, is likely to come from a combination
of bilateral and multilateral processes of consultation and consensus-building.
But the global consultative process is only just beginning to
unfold.
In this regard, the UK Government has a particularly
important role to play. As a leading commercial, diplomatic and
cultural influence on the rest of the world, the United Kingdom
can help to shape the political context that will keep the Internet
flourishing responsibly. For that reason, we believe that the
UK should make these issues an important dimension of its discussions
with other governments—both bilateral and multilateral—to
address restrictions on Internet content that might otherwise
create major impediments to the utility of the medium and present
unnecessary risks to individual users.
The private sector also has a vital role to
play. While retaining its leading role in developing the technologies
and standards that protect Internet security and reliability,
industry should advocate policies and principles that maximise
the value of the Internet for individual users, including basic
protections for freedom of expression, commercial integrity and
the reliability of information. We have initiated consultations
with other companies in our industry—as well as with other
governments and non-governmental organisations—to consider
the kinds of principles that would advance these values effectively
on an industry basis. But, in the end, the legal framework in
any particular jurisdiction is not one that private companies
are in a position to define for ourselves. National law and policy
set parameters in every country in which we do business, and private
companies are required to give them due deference as a condition
of engaging in business there.
That does not mean that compliance with local
law is a matter of deferring reflexively to local authorities
or endorsing any specific policy or ideology. Restrictions on
content should involve ongoing consultations in which the objective
of private operators is to protect the integrity of their services
and the privacy of their customers. Where the safety and security
of individuals is at stake, it is incumbent on both governments
and private companies to ensure that requests for customer information
in particular are subject to the highest available standards of
legal process. When that information is not maintained in the
country concerned, such requests necessarily invoke international
agreements that require established government-to-government procedures.
When it is maintained in the United States, private operators
clearly must comply with applicable US laws protecting on-line
privacy, such as the Electronic Communications Privacy Act (ECPA).
In addition, Microsoft will seek to provide appropriate notice
and transparency to our customers about the standards that will
be applied to their communications and the risks they may run
if those standards are violated.
Microsoft will continually review the overall
value of our services in any particular country and the conditions
created by government policies and practices. If we conclude that
those practices undercut or completely compromise the value to
customers of our services in that jurisdiction, we will consider
withdrawing those services until such conditions improve. But
we must always keep clearly in mind whose interests would be best
served by such a withdrawal. Will the citizens of that country
be better off without access to our services, or will their absence
just vindicate those who see our presence in the country as threatening
to their official or commercial interests?
China as a special case
Microsoft is keenly aware that China presents
a special case. Various agencies of the Chinese government are
engaged in a substantial effort to manage the kinds of information
available to Chinese citizens through the mass media. This effort
includes specific regulations restricting the publication on the
Internet of news-related content related to "current events
news information, reporting and commentary relating to politics,
economics, military affairs, foreign affairs, and social and public
affairs, as well as reporting and commentary relating to fast-breaking
social events." These regulations allow government authorities
to restrict content for any of a number of reasons ranging from
"harming the honor or the interests of the nation" to
"disrupting the solidarity of peoples" to "disrupting
national policies on religion, propagating evil cults and feudal
superstitions" and "spreading rumors, disturbing social
order, or disrupting social stability".[90]
And these regulations encompass the kinds of Internet-based services
provided by Microsoft's MSN division. The Chinese government's
approach on these matters is well documented in a Report issued
in February by the well-respected NGO Freedom House. [91]
Yet, despite those efforts and the serious consequences
for individuals who get caught up in the censorship process, the
Internet has already transformed the economic, cultural and political
landscape of China. In particular, it has had an enormous impact
in increasing public access to information. To quote the Freedom
House Report:
"While the state has expended considerable
effort to limit Chinese access to web pages deemed politically
subversive, many users find ways to access blocked Internet sites
by using proxies or anti-blocking software. The Internet has increased
the speed and convenience of accessing information and decreased
the financial costs of interpersonal communication . . . "
This is the powerful reality in China that we
must not lose sight of in our concern for the worst cases of recent
times. One recent independent survey of Chinese Internet users
found that "48% of Internet users believe that by going on
line the Chinese will learn more about politics, and 60% of users
believe the Internet will provide more opportunities for criticising
the government." [92]
As described in numerous newspaper accounts
in recent months, the Internet offers the best opportunity for
ordinary citizens in China to communicate their own observations
and opinions and to report the facts about important local events.
Just in the past few years, there have been repeated examples
in China of the ways in which official responses to domestic events
have been affected by the availability of information and opinions
communicated over the Internet. Most prominent have been reports
and commentary about the handling of health issues, such as SARS,
Avian flu, HIV/AIDS and water contamination. They demonstrate
the important role played by the kinds of services that companies
like Microsoft provide over the Internet. Since its introduction
in China less than a year ago, our MSN Spaces blogging service
has attracted more than three and a half million users and over
15 million unique readers, making it the £1 such service
in China. As our General Counsel, Brad Smith, noted in reviewing
our policies on these services:
We think that blogging and similar tools are
powerful vehicles for economic development and for creativity
and free expression . . . We believe that it's better to make
these tools available than not.
Therefore, based on grounds of human rights
and freedom of expression alone, Microsoft believes that we should
continue to provide our Internet-enabled services in China. That
is a judgment that we will continue to evaluate over time, drawing
on the best advice we can get, including the opinions of political
leaders who follow these issues in China with great interest.
If, on the other hand, the outcome of deliberations by the US
Government and other governments is to make it impossible for
us to continue these services in China—either because of
conditions imposed by the US Government, or because of further
actions on the part of the Chinese Government—we believe
that the Chinese people would be the principal losers—being
denied an important avenue of communication and expression.
Microsoft concerns
Let there be no misunderstanding about
the values that underlie Microsoft's decisions on this matter.
Our people—from the senior management of the company to
the more than 60,000 employees all over the world, including more
than 2,500 in China itself—care deeply about the impact
of our services on the people we serve. We are actively reviewing
all of our policies and practices to identify the best ways to
protect customers, while providing the widest possible array of
information sources.
The example that has received the most attention
to our services in China involved the removal of a well-known
blogging site on MSN Spaces authored under the pseudonym of "Michael
Anti" at the request of the Chinese government. The details
of that case have been carefully reviewed, and although we do
not think we could have changed the Chinese government's determination
to block this particular site, we regret having to do so and have
since clarified the manner in which we will deal with similar
requests in the future. Those policies seek to assure three things:
First, explicit standards for protecting content
access: Microsoft will remove access to blog content only
when it receives a legally binding notice from the government
indicating that the material violates local laws, or if the content
violates MSN's terms of use.
Second, maintaining global access: Microsoft
will remove access to content only in the country issuing the
order. When blog content is blocked due to restrictions based
on local laws, the rest of the world will continue to have access.
This is a new capability Microsoft is implementing in the MSN
Spaces infrastructure.
Third, transparent user notification:
When local laws require the company to block access to certain
content, Microsoft will ensure that users know why that content
was blocked, by notifying them that access has been limited due
to a government restriction.
Our ongoing reviews may result in other changes
of policy as we continue to examine our options and seek the input
of a broad array of experts. In addition to active discussions
within the industry and with the Executive branch, we have been
meeting with NGO's focused on issues of human rights in China
and will continue those discussions. We are seeking the advice
of recognised experts on China to better understand the dynamics
and trends affecting the issues we are addressing here. And we
will continue to discuss these issues with government officials
in many jurisdictions, including testimony before appropriate
Committees such as this one.
Industry influence
Finally, let we would like to address the suggestion
that Microsoft alone, or in collaboration with other companies
in our industry, should be able to change the standards enforced
by the Chinese government—or alternatively, to negotiate
the manner in which we choose to comply with those standards.
Some commentators assert that Microsoft is in a position to temper
or delay our degree of compliance with Chinese law and criminal
process without losing our license to do business in China. Some
have even suggested that we have not tried to pressure the Chinese
government in this regard because we seek to curry favor for commercial
reasons. These arguments ignore the basic realities of doing business,
not only in China, but in most other countries.
Indeed, some commentators have argued or implied
that private companies should never provide information to governments
about the identity of customers or agree to any sorts of restrictions
on Internet content. But the simple fact is that there is not
a government in the world, including the US Government, which
would accept such an assertion by a private company seeking to
do business within their jurisdiction. Indeed, it is a well-established
principle of international jurisdiction that global Internet companies
have to follow the law in the countries where they provide services
to local citizens, even when those laws are different from those
in their country of origin. [93]Taking
the contrary position in defiance of government directives would
be tantamount to inviting sanctions—up to and including
the prosecution of our employees, the termination of our services
in-country and even exclusion of the company from doing business
in the country entirely.
When pressed on this point, most observers would
no doubt concede that there are circumstances—such as instances
of kidnapping, child abuse, or cyber-attack—when the apprehension
of serious criminals justifies cooperation with law enforcement
authorities even in authoritarian societies—so long as law
enforcement is not used as a pretext for political repression.
Yet in practice, when companies face law enforcement requests
of this kind, there is little room to question the motivations
or and second-guess the judgments made by officials in these cases,
particularly where the judicial system affords little opportunity
to challenge those judgments independently.
In the end, the issue comes back to a difficult
judgment of the risks and benefits of these powerful technologies,
not just in China, but in a wide range of societies where cultural
and political values may clash with standards of openness and
free expression. Microsoft cannot substitute itself for national
authorities in making the ultimate decisions on such issues. What
Microsoft will do is provide the technologies and services that
enable individuals and organisations to harness the power of the
Internet for their own purposes—if allowed to do so. And
we will continue to advocate that people should have the maximum
opportunity to use these technologies in exercising those decisions
for themselves.
We think that the trend of history and the impact
of technology will continue to come down on the side of greater
openness and transparency—as it has in China, and as it
is likely to do elsewhere. As our Chairman, Bill Gates, said recently
in answer to a question about Internet censorship:
"You may be able to take a very visible
Web site and say that something shouldn't be there, but if there
is a desire by the population to know something, it is going to
get out. "
Thank you for this opportunity to address the
Committee on these important matters.
Matt Lambert
Director of Government Affairs
Microsoft Ltd
April 2006
90 See the Rules on the Administration of Internet
News Information Services, available on-line at http://www.cecc.gov/pages/virtualAcad/index/phpd?showsingle=24396 Back
91
Ashley Esarey, "Speak No Evil: Mass Media Control in Contemporary
China," A Freedom House Special Report, February 2006, at
page 11. Back
92
"Surveying Internet Usage and Impact in Five Chinese Cities"
by Guo Liang, Research Center for Social Development, Chinese
Academy of Social Sciences, 17 November 2005, at page 97. (Sponsored
by the Markle Foundation based in New York. See www.markle.org Back
93
Indeed, even in the United States, both federal and state authorities
have prosecuted those involved in offshore gaming activities despite
the fact that the online casinos are located in jurisdiction in
which the activities are legal. See, eg, Vacco v World Interactive
Gaming Corporation, 714 NYS.2d 844 (NY Sup Ct 1999) (offshore
Internet gambling operations held to violate federal laws and
the state penal code). The court described the central issue as
"whether the State of New York can enjoin a foreign corporation
legally licensed to operate a casino offshore from offering gambling
to Internet users in New York." It decided the state chould
do so because of the "deep-rooted policy of the state against
unauthorised gambling." See also In re Grand Jury Proceedings,
US v Bank of Nova Scotia, 691 F.2d 1384 (11th Cir 1982) (affirming
a district court decision holding the Bank of Nova Scotia in civil
contempt for failing to comply with an order of the court enforcing
a grand jury subpoena requiring it to produce documents in violation
of Bahamian bank secrecy laws "even though the very fact
of disclosure may subject the Bank to criminal sanctions by a
foreign sovereign"). Back
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