Google in China: Business ethics, business sense or both?

A fascinating Corporate Social Responsibility (CSR) issue for the internet titan Google, whose business mission statement is stated simply as ‘Don’t Be Evil’. China offers enormous potential as a profitable marketplace, and its poor human rights record shows some sign of gradual improvement as the country engages with the outside world. But the Chinese government has reminded all companies that they must abide strictly by state controls of the country’s cyberspace. Recent events have lead Google to say ‘no’, and they are threatening to pull out. Why?

The row was trigged after Google said it was hit by a “sophisticated and targeted” cyber attack originating from the Chinese government who were trying to peek into the email accounts of human rights activists. The Chinese government try to control internet content to maintain their grip on power. Google is not the only company targeted; Yahoo and Adobe think they have been hit too.

Google agonized about doing business in China after a much hyped launch there in 2006 – and the condition that they would censor their Chinese search engine - google.cn. Was this an ethical thing to do? Was it helping China to engage with the world and modernise, or giving in to government bullying?

The Times quote Teng Biao, a law professor and human rights lawyer, who was the victim of a cyber attack on his Gmail account. He said: “Google leaving China makes people sad, but accepting censorship to stay in China and abandoning its ‘Don’t Be Evil’ principle is more than just sad.”

But the interesting issue to discuss is the deeper question about financial interest. Google’s Chinese rival Baidu were quick to call the move “hypocritical” and financially driven. Many have dismissed Google’s decision as sour grapes because of its relative failure in the market, which market research companies estimate at 15 to 30 per cent, compared with 60 to 70 per cent for the home-grown search engine Baidu.

Google are not stupid and will also be taking a long term strategic view. They have sufficient funds to be able to lose a few hundred million dollars of revenue in China in the short term. A far bigger threat is if we lose our trust in the internet giant. Their future dominance will be built on us increasingly entrusting them with our mail, calls, document and picture storage as well as web searches. Losing customer confidence would be financially disastrous.

So you choose: a principled stance for good, or a calculated move for long term benefit? Or both?

Follow BBC links and video clip from here