[iDC] Google in China: Protecting Activists by Protesting Industrial Policy?

[Frank Pasquale]

Hi,

You've probably all heard about Google's threats to exit China.  I have a
few thoughts on it:

1. A quick deflationary note:  If I were running a general purpose search
engine with a ~33% market share (as Google does in China), facing a
competitor with a ~60+% market share (like Baidu), I'd seriously consider
exiting the market.  We've now reached a point at which dominance in general
purpose search is self-reinforcing.*

2. I think this WSJ quote is insightful:

"The Google syndrome caps growing complaints by foreign businesses over a
deteriorating business environment.. . . Younger bureaucrats are more
nationalistic and skeptical of the value of letting in foreign companies. .
. Last year, for example, foreign executives said bidding practices for wind
energy were rigged to exclude foreign companies."**

In other words, China has an industrial policy, and is acting to ensure that
the trade secrets of firms controlling critical infrastructure are
accessible to national authorities.  (The shadowy hackers are probably a
cyber-analogue to the "Fifty Cent Party," a pro-CP astroturf "movement" that
is for all intents and purposes a state actor.)  I have urged such
accessibility in the US context in order to prevent stealth marketing and
other unfair and deceptive practices; of course, as an attorney, I have
urged it be accomplished only via regular processes of administrative
inspection guaranteeing full protection of relevant intellectual property. I
have no doubt that the Chinese hacking has darker purposes. As in Gonzales
v. Google, this is a case where the trade secrecy rationale for Google's
resistance to authorities is just as strong as the "user privacy" rationale.
 When corporate privacy (i.e., trade secrecy) aligns with user privacy,
Google will fight for the latter value.

3. Perhaps search engines will split along national lines.   Google will
cooperate with US law enforcement, but does not want to deal with Chinese
law enforcement's "information sharing" infrastructure.  Its action might be
a heartening step toward restoring the public/private distinction I discuss
here:
http://www.concurringopinions.com/archives/2009/06/the-many-deaths-of-privacy.html

On the other hand, it could just portend further integration of state and
corporate power along national lines (reminding me of Goldsmith & Wu's book
Who Controls the Internet?)).

4. Siva Vaidhyanathan and Michael Zimmer are doing a great job
tweeting/facebooking excellent commentary.

--Frank

*See
http://madisonian.net/2009/03/18/seven-reasons-to-doubt-competition-in-the-general-search-engine-market/.


**From
http://online.wsj.com/article/SB10001424052748704675104575000772033650164.html?mod=e2tw
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