Google Calls China’s Bluff


It is the 21st century equivalent of a showdown at the OK Corral – Google has called out China for allegedly hacking into the email accounts of Chinese human-rights activists and engaging in disruptive cyber attacks against Western companies that do business in China.  The myth that Western and Chinese companies are treated equally in China has now thoroughly been discredited after having been damaged by the Chinese authorities disapproval of the Coca-Cola/Huiyuan merger last year.  Now news reports are coming out detailing the attacks against a law firm and companies that are suing the Chinese government like Cybersitter for infringing on it’s IP.

Google’s announcement has unleashed a firestorm of debate, claims, and counter-claims from the companies involved as well as netizens around the world.  Chinese officials have stated that perhaps Google is just not prepared to compete in the Chinese market, contrary to the fact that Google has gone from a 15% to 30% search share over the past five years all the while having to jump through more regulatory hoops than its domestic search rival Baidu.  Perhaps most tellingly is the reaction in the real world – citizens have been leaving flowers and wreaths at the entrance to Google’s China headquarters, mourning the loss of their limited freedoms.

Business analysts seem to be split so far as to whether this is a good decision for Google or it will hurt their business in the long run.  Although China is a huge market, it does not contribute much to Google’s bottom line (less than 2%), and it seems as if these latest bold intrusions and the crackdown on Facebook, Twitter, and YouTube forced the company to choose between its mission, “to organize the world’s information and make it universally accessible and useful”, and Chinese government demands.

On another, perhaps not to serendipitous note, the world’s other emerging economic heavyweight India, touted its own media freedoms and independent transparent legal system that ensures stability and equal treatment of corporate entities under the rule of law in the Wall Street Journal.