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Thread on the increasingly irreconcilable conflict between democratic norms/values/legal principles and doing business in the PRC, esp for internet companies, with examples from two cases in which I am lead counsel.
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In the early 2000s, during a more hopeful time in the internet age, PRC citizens hoping to communicate more freely than the CCP would let them often looked to American internet companies. America was the land of free speech, they thought, and surely an American company...
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...would sympathize with their efforts to speak freely on the internet.
One of the companies they turned to was Yahoo. They signed up for Yahoo email addresses, and, for a while, were able to communicate less fearfully than they'd previously been able.
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One of the companies they turned to was Yahoo. They signed up for Yahoo email addresses, and, for a while, were able to communicate less fearfully than they'd previously been able.
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It didn't last long, however.
In 2004, a journalist named Shi Tao received a CCP directive prohibiting any reporting on the 15th anniversary of the Tiananmen Square massacre. Shi Tao anonymously sent an email to a Chinese-language website based in New York describing...
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In 2004, a journalist named Shi Tao received a CCP directive prohibiting any reporting on the 15th anniversary of the Tiananmen Square massacre. Shi Tao anonymously sent an email to a Chinese-language website based in New York describing...
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...the directive, using a Yahoo email address.
The regime was understandably livid when the information was published. It began an investigation, and demanded Yahoo's PRC-based operations turn over user data.
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The regime was understandably livid when the information was published. It began an investigation, and demanded Yahoo's PRC-based operations turn over user data.
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At this juncture, people like Shi Tao might have expected that, being a company founded in America, Yahoo might have resisted, citing free speech principles. Considering their lack of first-hand experience with corporate America, they can be forgiven their naiveté.
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Yahoo folded like a wet napkin, and, as a result, Shi Tao was sentenced to 10 years, eventually serving 8.5.
An uproar ensued in the democratic world, and Congress even held hearings. During one of those hearings, Yahoo's senior in-house lawyer pleaded ignorance...
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An uproar ensued in the democratic world, and Congress even held hearings. During one of those hearings, Yahoo's senior in-house lawyer pleaded ignorance...
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...telling Congress that at the time of the regime's request, Yahoo had no way of knowing "the nature of the investigation." But that wasn't true, given that the relevant order said it was a "state secrets" investigation, which anyone who knows anything about the PRC...
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...knows is an extremely common justification for suppressing what pretty much all democratic societies would consider protected speech.
Meanwhile, Shi Tao and another Yahoo user who'd been imprisoned in the PRC after Yahoo turned over their data to the regime...
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Meanwhile, Shi Tao and another Yahoo user who'd been imprisoned in the PRC after Yahoo turned over their data to the regime...
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...had filed a lawsuit against Yahoo in California. As part of the settlement of that lawsuit, Yahoo created the $17.3 million Yahoo Human Rights Fund, meant to provide humanitarian assistance to people in the PRC who'd been imprisoned for online dissent.
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Fast forward to today. Based on public records, of the $17.3 million, more than $10 million has been spent, with less than 4% of that spending having gone to imprisoned dissidents and their families. The rest has gone to enriching those entrusted with running the Fund.
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Based on informal investigations, and thanks to certain insiders, it is relatively clear that Yahoo both knew about this *and* had the authority to stop it from happening. But for reasons we are still trying to ascertain, it failed to do so.
Meanwhile, in public, it...
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Meanwhile, in public, it...
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...repeatedly touted the Fund, and used it to defeat shareholder proposals that the company should do more to protect internet freedom.
After four years of procedural wrangling, including a trip to the D.C. Circuit, a lawsuit on behalf of imprisoned dissidents to...
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After four years of procedural wrangling, including a trip to the D.C. Circuit, a lawsuit on behalf of imprisoned dissidents to...
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...sort all this out, and to restore the Fund to its humanitarian purpose, is finally proceeding to discovery.
Meanwhile, another lawsuit, involving strikingly similar themes, and in many ways much more important, is just getting started.
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Meanwhile, another lawsuit, involving strikingly similar themes, and in many ways much more important, is just getting started.
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It is against Tencent/WeChat, and it is brought mainly on behalf of California WeChat users. Among its claims are that Tencent/WeChat has been profiting from the censorship and surveillance of WeChat users in California, and has been misleading those users about such...
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...in violation of California law. It also details numerous episodes where the family and friends of US-based WeChat users have been visited by PRC security agents over the content of communications sent from the US.
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For fear of even harsher retaliation now that they've filed a lawsuit, my clients are proceeding under pseudonyms.
Nevertheless, Tencent/WeChat, through their lawyers, have requested my clients' identities.
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Nevertheless, Tencent/WeChat, through their lawyers, have requested my clients' identities.
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And to be perfectly frank, we don't mind if Tencent/WeChat know their identities. But for obvious reasons, including the safety of PRC-based family and friends, we don't want the regime to have that information.
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But given that even an American company like Yahoo wasn't willing or able to resist the regime's demand for information, and given the regime's all-but-inevitable demand for information here, we were concerned that giving the plaintiffs' identities to Tencent/WeChat would...
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...result in that information being turned over to the regime.
A suggestion was raised that the parties agree to a protective order, issued by the court where the lawsuit is pending, to prevent such an outcome.
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A suggestion was raised that the parties agree to a protective order, issued by the court where the lawsuit is pending, to prevent such an outcome.
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But as we pondered this option, a question arose. Suppose we have such an order, but the regime comes calling anyway, demanding that Tencent/WeChat turn over the plaintiffs' identities. Would Tencent/WeChat really be able to resist, especially considering the increased...
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...efforts by the regime to insinuate itself into all manner of ostensibly private businesses, including the 2017 passage of a National Intelligence Law obligating all PRC organizations to cooperate with the regime's intelligence-gathering efforts?
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We put the question to Tencent/WeChat's US lawyers, and said that a prerequisite for us turning over the plaintiffs' identities was that Tencent/WeChat at least provide an *explanation* for how it would propose to handle such conflicting obligations.
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After all, what good is a US court order to protect the plaintiffs' identities if Tencent/WeChat were just going to ignore it in the face of competing obligations imposed on it by the regime?
Tencent/WeChat's response? No explanation would be forthcoming, leaving us at...
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Tencent/WeChat's response? No explanation would be forthcoming, leaving us at...
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...an impasse for the next little while. The court proceedings are public, so interested folks can stay tuned to see how things develop.
Meanwhile, both of these cases point to a larger reality that grows more and more stark by the day.
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Meanwhile, both of these cases point to a larger reality that grows more and more stark by the day.
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That is the reality of an increasingly irreconcilable conflict between democratic norms/values/legal principles and doing business in the PRC, esp for internet companies.
As someone with many entrepreneurs in the family, and as an entrepreneur myself, I am sympathetic...
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As someone with many entrepreneurs in the family, and as an entrepreneur myself, I am sympathetic...
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...to a degree. Business and politics are uneasy bedfellows, and it can be difficult to reconcile profits and principles.
But I am only sympathetic to a degree, because however difficult it is to do so, it is not impossible.
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But I am only sympathetic to a degree, because however difficult it is to do so, it is not impossible.
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Even if a business based in a democratic country feels like it *must* operate in the PRC, the least it can do is be honest about the reasons.
Given that the "change through trade" idea has proven false, spare the rest of us the argument that the reasons...
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Given that the "change through trade" idea has proven false, spare the rest of us the argument that the reasons...
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...have anything to do with the pure pursuit of profit. At that point, at least we will all know where everyone stands.
And if a PRC-based business wants to operate in the democratic world, the least it can do is be honest about how things work in the PRC.
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And if a PRC-based business wants to operate in the democratic world, the least it can do is be honest about how things work in the PRC.
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Given the existence of the National Intelligence Law and other trends in the PRC, spare the rest of us the claim that the relationship between the regime and the PRC business community is not something people in the democratic world need to be concerned about.
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Decades ago, Solzhenitsyn urged those who wanted to resist totalitarianism: "Live not by lies."
And if a person was unwilling to do so--unwilling to "defend even his own soul"--he urged such a person to "say to himself plainly: I am cattle, I am a coward...
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And if a person was unwilling to do so--unwilling to "defend even his own soul"--he urged such a person to "say to himself plainly: I am cattle, I am a coward...
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...I seek only warmth and to eat my fill."
So too today. If you don't care enough about democratic values to resist the regime, just say so. But don't lie to yourself or the rest of us.
And if you insist on going along with the regime's lies, consider whether...
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So too today. If you don't care enough about democratic values to resist the regime, just say so. But don't lie to yourself or the rest of us.
And if you insist on going along with the regime's lies, consider whether...
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...you value anything at all, other than warmth and eating your fill.
I personally wouldn't judge you for it; after all, such is probably how most of humanity has always been.
But I would wonder: when the time comes to think back on how you lived your life...
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I personally wouldn't judge you for it; after all, such is probably how most of humanity has always been.
But I would wonder: when the time comes to think back on how you lived your life...
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...how will you judge yourself?
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