Proposed law targets tech-China cooperation

Legislation being readied by politician proposes criminalizing cooperation with governments of China, Iran, others.

Nearly every U.S. company with a Web site located in China will have to move it elsewhere or its executives would face prison terms of up to a year, according to proposed legislation expected to be introduced this week in the U.S. Congress.

A draft version of the bill reviewed by CNET represents the first serious attempt to rewrite the ground rules controlling how U.S. Internet companies may interact with foreign governments. If enacted, it would dramatically change the business practices of corporations with operations in China, Iran, Vietnam and other nations deemed to be overly "Internet-restricting."

The highly anticipated proposal, created by Rep. Christopher Smith (R-N.J.) in response to recent reports about censorship in China by Google, Yahoo and others, also makes it unlawful to filter search results or turn over information about users to certain governments unless the U.S. Justice Department approves. It would also impose new export restrictions to those nations.

"For the sake of market share and profits, leading U.S. companies like Google, Yahoo, Cisco and Microsoft have compromised both the integrity of their product and their duties as responsible corporate citizens," Smith said at a related hearing in the House of Representatives on Wednesday. Smith, chairman of a human rights subcommittee, likened that cooperation to companies that aided the Nazis in World War II.

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Yahoo spokeswoman Mary Osako and Cisco Systems spokesman John Earnhardt said their companies were still evaluating the draft. Google and Microsoft did not respond immediately to requests for comment.

During Wednesday's hearing, politicians predicted that this bill would be introduced in the next few days, perhaps even as early as Thursday. Google Vice President Elliot Schrage expressed cautious agreement with the broad principles of this approach, leading some subcommittee members to jest that the search company should be listed as a joint sponsor.

It's unclear what the prospects are for the legislation, titled the Global Online Freedom Act of 2006. While the measure is likely to draw support from some politicians from both major parties, no companion version currently exists in the U.S. Senate, and election-year politics could complicate efforts to enact it anytime soon. Also, the proposal puts American businesses at a severe competitive disadvantage with China-based firms, which are immune from such rules and can locate servers in China and offer much faster response times for Internet users in that country.

Broad definitions
In addition, the draft bill--time stamped Tuesday at 6:16 p.m. ET--could face opposition from a broader alliance of U.S. companies because it is written so broadly. The requirement that Web sites be moved away from Internet-restricting nations applies to any business with a site that responds to a query by displaying "information available on the Internet"--a broad definition that seems to sweep in any search box that accepts textual input and offers a list of Web pages in response.

The media watchdog group Reporters Without Borders (RWB), which Smith cited as an influence when drafting the legislation, said it has not reviewed the 26-page measure. RWB has called for similar laws that would, for instance, prohibit search engines from incorporating automatic filters to reject phrases such as "democracy" or "human rights."

"Our first reaction would be that hopefully this hearing and all this congressional and media attention is going to push the companies themselves at some point to regulate themselves," RWB's Lucie Morillon, who testified in Wednesday's hearing, said in a telephone interview with CNET If that industry self-regulation fails, she warned, then legislation is necessary--it's "the only thing left."

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