04/21/2011 11:26 am ET Updated Jun 21, 2011

Facebook Faces China Censorship Dilemma

By Meg Roggensack; Senior Advisory, Business and Human Rights

With President Obama fresh off a visit to Facebook Headquarters in Silicon Valley for a town hall meeting on the role of social media in politics, the social networking company is considering investments in China, a country whose government wants social media out of politics.

According to news reports, Facebook is evaluating possible arrangements that would allow the company access to China's estimated 450 million internet users. For example, Bloomberg recently reported that a deal was in the works for a joint venture with the Chinese web services company Baidu, although the current status of that deal is uncertain. As Facebook joins a long list of U.S. ICT companies in or looking to enter China, its move raises fresh questions about the ICT sector's responsibility for facilitating China's restrictive Internet policies.

China employs one of the largest and most sophisticated Internet censorship and surveillance systems in the world. Last November, the U.S. China Economic Security Review Commission reported on developments in 2010 and found that the private sector in China plays a key role in Internet control and management.  Particularly singled out for comment was Baidu, the most popular site in China and Facebook's prospective partner in this arrangement.  According to Congressman Chris Smith, "Baidu is now very much a part" of China's "comprehensive oppression" on the Internet.

Additionally of concern to American policymakers should be the responsibility of U.S. actors in Baidu's cooperation with China's control of the Internet.  The commission report highlighted that it was American investors who provided the initial funding for Baidu and that U.S. based investment firms still own 31.4% of the company, second only to the 31.9% owned by co-founder and CEO Lǐ Yànhóng.

As head of China's largest internet firm, one would hope that Lǐ has some maneuvering room to engage with the Chinese government on issues of censorship and privacy, but that is not how he sees it.  In his view, his options in dealing with censorship demands are very limited and accepting these policies is simply the cost of doing business in this lucrative market.  "I'm Chinese. I don't have any other choices," he remarked at an industry forum last year. Industry reports note that Lǐ considered, but rejected, a Google-like solution for fear that hosting search results from Hong Kong would brand him an enemy of the state.

At the same time, Lǐ has argued that foreign companies have greater latitude, given their value as "strategic partners."  Lǐ has acknowledged that complying with China's policies creates unwanted costs and damages his company's relationships with its users.  Since Lǐ doesn't believe he is in a position to challenge censorship demands, it is unfortunate that Baidu's U.S. investors have not used their latitude to question China's repressive policies.

Facebook's potential partnership with Baidu to enter the Chinese market raises questions about the extent to which market leaders -- whether Chinese or foreign -- can and should use that position to promote less restrictive policies and to take affirmative steps to protect their users from the consequences of existing policies. We're assuming that Facebook has carefully considered the risks that Baidu faces, as well as its own potential reputational risk from partnering with a company so closely identified with China's repressive internet policies.  Even so, any partnership with Baidu would provide a new opportunity to revisit Baidu's position on engagement with the Chinese government. Together, these two market leaders are in a strong position to promote policies that address ongoing user concerns.

At minimum, before Facebook moves forward to finalize this potential partnership, we hope that Facebook will:

  • Have policies and procedures in place to identify and respond to government demands -- for user information or to limit its services -- in ways that protect its users' freedom of expression and privacy.
  • Hire personnel with expertise in international human rights guarantees and familiarity with conditions faced by Chinese civil society activists and organizations, and ensure that they are empowered to make decisions about compliance with Chinese government requests.
  • Take steps to protect user privacy, including making https the default setting, offering users training on privacy settings, and establishing a "hotline" and other tools to enable users to raise ongoing concerns.

To date, Google, Godaddy, and a few others have been the only ICT companies to challenge China's restrictive policies. We hope Facebook follows their lead, and at a minimum, takes the steps we have identified.