Stockholders Challenge Tech Companies on Censorship

May 01, 2007 | BY

clpstaff

Since entering the Chinese market, Microsoft, Yahoo, and Google have at times faced intense criticism in the United States for filtering out search results…

Since entering the Chinese market, Microsoft, Yahoo, and Google have at times faced intense criticism in the United States for filtering out search results and other internet-related information deemed sensitive by authorities.

Now, New York City pensioners, who collectively own over US$1 billion in shares in the three companies, are asking their boards to challenge censorship rules in countries with authoritarian governments, including China. Comptroller William C Thompson, Jr has asked the internet service providers to honour Article 19 of the Universal Declaration of Human Rights, which guarantees freedom to receive and impart information and ideas through any media regardless of frontiers.

“Technology companies in the United States have failed to develop adequate standards by which they can conduct business with authoritarian governments while protecting human rights, including freedom of speech and freedom of expression,” Thompson says. “Political censorship of the internet degrades the quality of that service and ultimately threatens the integrity and viability of the industry itself, both in the United States and abroad.”

The Office of the Comptroller of New York City, which at last quarter owned 687,244 Google shares (valued at US$276 million), put forward a resolution at its latest shareholder meeting on behalf of the retired city employees, teachers, police and firefighters for which it manages pension funds.

“The vote took place last week, but Google declined to disclose the vote totals [or] percentages at this time,” Jeff Simmons of the Comptroller's office said earlier in May.

According to Google's April 6 2007 Proxy Statement (pursuant to Section 14(a) of the US Securities Exchange Act of 1934), the board of directors recommended a vote against the stockholder proposal, which resolved that “shareholders request that management institute policies to help protect freedom of access to the Internet.” The proposal includes minimum standards such as not hosting user identification data in countries where the internet is restricted because political speech can be treated as a crime, not engaging in pro-active censorship, using all legal means to resisting demands for censorship, and clearly informing users when the company has filtered content they are trying to access due to compliance with government requests. The proposal also requires informing users about the company's data retention practices, and documenting and making public all cases where legally-binding censorship requests have been complied with.

A member of Google's in-house legal team in China tells China Law & Practice that although such matters are usually made known to the team, they had not heard anything of the proposal or the shareholder vote.

This premium content is reserved for
China Law & Practice Subscribers.

  • A database of over 3,000 essential documents including key PRC legislation translated into English
  • A choice of newsletters to alert you to changes affecting your business including sector specific updates
  • Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
For enterprise-wide or corporate enquiries, please contact our experienced Sales Professionals at +44 (0)203 868 7546 or [email protected]