Google Inc defied the Chinese government by saying it will end self-censorship of its search engine and may quit the world’s largest Internet market after attacks on e-mail accounts of human-rights activists.
A series of “highly sophisticated” attacks on Google and at least 20 other companies last month, as well as limits on free speech, led to the decision, Google said in a statement on its Web log. Images of the 1989 Tiananmen Square crackdown were among previously censored results visible on Google.cn today.
US Secretary of State Hillary Clinton said the Chinese government should respond to Google’s “serious” allegations. A departure would deprive Google of an estimated $600 million in annual revenue from China’s 338 million Internet users and may help Baidu Inc extend its lead in the country.
“Google and others fear China’s involvement above and beyond censorship,” said George Kurtz, worldwide chief technology officer at McAfee Inc, the second-biggest maker of security software. “This is the straw that breaks the camel’s back.”
China’s Internet authorities are seeking more information about Google’s intentions, the official Xinhua news agency said, citing an unnamed “high-ranking” official with the State Council Information Office. Wang Lijian, a Beijing-based spokesman for the Ministry of Industry and Information Technology, said he couldn’t comment as he was unaware of the situation. China’s foreign ministry declined to comment.
Google’s decision to stop self-censorship “lays down the gauntlet to other Internet companies operating in China: to be transparent about what filtering and censorship the government requires them to do,” Kate Allen, Amnesty International UK director, said in an e-mailed statement.
Companies in industries ranging from finance to technology, media and chemicals had been targeted by hackers, Google said. The attacks targeted 34 companies, most of them from Silicon Valley, California, the New York Times reported, citing unidentified people familiar with Google’s investigation.
“Western companies such as Google face a dilemma in China,” said Norbert Pohlmann, a professor and head of the Internet-security research at the University of Applied Sciences in Gelsenkirchen, Germany. “On the one hand, they’re eager to benefit from China’s dramatic economic growth. On the other, they have to deal with local laws and values that are different from the West. Especially for media companies, it’s a tricky issue as China has a different definition of privacy and human rights.”
Mountain View, California-based Google said it’s notifying other companies that were attacked and is working with US authorities. Adobe Systems Inc, the world’s biggest maker of graphic-design programs, said a “sophisticated, coordinated” attack targeted network systems it managed.
Gmail users who are advocates of human rights in the US, China and Europe, have had their accounts accessed, most likely through phishing scams or malware on the users’ computers, Google said.
“The Chinese have long censured the Web, but this is the first time they have targeted accounts overseas,” Arvind Ganesan, head of Human Rights Watch’s business and human rights program, said in an interview from Geneva. “If this wasn’t done by the security services, then it was certainly done by a proxy for them.”
With phishing scams, hackers pretending to be legitimate Web sites ask users to divulge confidential information, while malware includes programmes that record users’ keystrokes as they type in passwords.
A departure would follow four years of clashes over censorship and highlight the challenges global companies face operating in a one-party state that controls the flow of information.
Google and Yahoo Inc were among companies that were criticised by US lawmakers in 2006 for complying with the Chinese government’s restrictions on the Internet. Yahoo co- founder Jerry Yang said in 2005 that a court order obliged the Sunnyvale, California-based company to hand over user records that led to the conviction of a Chinese journalist.
Google is still censoring search results on Google.cn, its Chinese search engine, Courtney Hohne, a Singapore-based spokeswoman, said in an e-mail today. “Nothing has changed at all,” she said.
Baidu’s American depositary receipts jumped 11 percent to $430.50 in Nasdaq Stock Market trading at 9:48 am New York time, while Google fell $9.81, or 1.7 per cent, to $580.67.
Baidu accounted for 58.4 per cent of China’s Internet search market in the fourth quarter, compared with 35.6 per cent for Google, according to researcher Analysys International. Baidu declined to comment on Google’s decision.
“There’s no other competitor, so if Google pulls out, Baidu is left by itself,” said Erwin Sanft, an analyst at BNP Paribas SA in Hong Kong. “If they pull out of China, it’s very hard to really get back in the market and still have a similar presence.”
The move signals Google is hewing closer to its “Don’t be evil” motto, said Heath Terry, an analyst at FBR Capital Markets in New York. Google is still a “long way away from getting out of China,” Terry said. The company can threaten to leave the country because China accounts for such a small piece of Google’s sales, he said.
“This is their way of opening up this important conversation,” Terry said. “This is their way of starting to move the conversation forward.”
Google’s plan to stop censoring on its Chinese site “sets a great example” for other companies, New York-based Human Rights Watch said in a statement.
The attack, which occurred in the middle of December, originated in China and resulted in intellectual property being stolen, Google said. Two Gmail accounts may have been accessed as part of last month’s attack, it said.
Access to Google’s YouTube video site was blocked in China after Tibet’s government-in-exile released a video on March 20 that it said showed Chinese police beating protesters. The video was described by China’s official Xinhua News Agency as a fabrication.
Google also has drawn complaints from a Chinese writers’ group about its online book-scanning project. Google should stop scanning books without permission, the China Writers Association said in November. Google apologised to authors this week for a lack of communication.
Last year, China pushed personal-computer makers to install filtering software on their machines. The government backed away from that requirement in June, though it later said it would require the software on computers in schools and Internet cafes.
