U.S. Internet Companies Face Frustration Internationally

July 20, 2006 -- -- Microsoft's top lawyer has acknowledged frustrations with local Web censorship in places such as China, but said it was the cost of doing business and providing services in countries with repressive regimes.

"It's a very thorny issue for us to work through," Brad Smith, Microsoft's senior vice president and general counsel, said in an interview for ABC News Now's technology show, "Ahead of the Curve." "We do want to be present in China, we do think we deliver valuable services to people in China, we want to be principled and we want to be transparent.

The software giant, along with Yahoo Inc. and Google, came under harsh criticism by Amnesty International for cooperating with Chinese officials by removing or blocking content on the Internet.

"In assisting the Chinese administration by complying with its censorship demands, these companies are seen to be facilitating or sanctioning the government's efforts to control the free flow of information," Amnesty International said in a report entitled "Undermining Freedom of Expression in China," which was released Thursday. "They thereby contravene established international norms and values, and compromise their own stated principles."

The report singles out Microsoft for removing blogs from Microsoft-hosted MSN Spaces, which they launched in China in June 2005.

Smith said Microsoft was simply obeying Chinese law -- but still makes the material available elsewhere.

"We said that we would only remove content when there was a legally binding order issued upon us, that even when we did remove content, we would make sure it was accessible to the rest of the world, where the content is not illegal, he said. "And even in China itself, we'd be transparent, and we would put a notice up that would say we were forced to remove this content because of a Chinese legal order so people would know that it just didn't go away by accident."

Smith praised Amnesty International for its focus on the issue.

"I don't think this is an issue that can be addressed by a company, by going all the way to one direction and closing one's eyes, or going all the way to the other direction and saying, 'We are not going to participate at all because this is difficult,' " he said. "We have to be in it for the long haul, we have to be principled. If we do that, we will be, I think, a significant force for all of the good things that come out of the Internet."

The report criticizes Google for agreeing to censor results on its Chinese-based search engine, Google.cn, which was launched earlier this year. In addition to slamming Yahoo for the same practice, Amnesty International also criticized them for turning over information to Chinese authorities that led to the arrest and imprisonment of two dissident journalists.

In a written statement, Google said it tells users of Google.cn when results have been censored "in response to local laws and regulations" and that the company avoids offering services when it cannot guarantee users' privacy.

Yahoo Inc.'s Chinese partner, Alibaba.com, said it focuses on Internet commerce, not news and information.

"By creating opportunities for entrepreneurs and connecting China's exporters to buyers around the world, Alibaba.com and Yahoo China are having an overwhelming positive impact on the lives of average people in China," Alibaba.com spokesman Porter Erisman said in a written statement.