Google threatens to pull out of China over hacking allegations

Paul Raven @ 13-01-2010

Well, this story’s everywhere this morning. After allegedly uncovering a “sophisticated and targeted” hacking attack, Google are now “reviewing the feasibility of their business operations in China”, which includes the controversial censorship systems they applied to Google.cn; here’s the official announcement, which is a beautiful example of legalese that says one thing, implies many others and leaves a lot of spaces uncharted. Chinese citizens are laying flowers outside Google’s Beijing office [via Jan Chipchase].

Beyond the glossy surface of the public announcements, however, we can’t be entirely sure what’s going on. The Wikileaks crew have tweeted a few revealing points:

gossip inside google China is gov hackers found infiltrating google source code repository; gmail attacks an old issue. #

Gossip from within google.cn is Shanghai office used as CN gov attack stage in US source code network. #

China has been quietly asking for the same access to google logfiles as US intelligence for 2-3 years now. #

Should be noted that Google keeps secret how many user’s records are disclosed to US intelligence, others. #

correction: the time of the Chinese requests/demands are not exactly known and are possibly in the last 12 months. #

Regardless of the exact causes and motivations behind Google’s threats to withdraw, it highlights the incredible bargaining power that a company of that size and influence has on the same stage as nation-states. It’s not entirely unimaginable to think that Google suspected something like this might have happened all along, and they were just waiting for the right moment to bring their leverage to bear – after all, China’s a big old market, and they’d probably far rather its citizens had full unfettered access to the web, if only so as to advertise to them more effectively. So why not agree to initial compromises, let the people get a taste for what they have to offer, and then threaten to take the toys home when the government makes an institutionally inevitable blunder?

It remains to be seen how seriously the Chinese government will take this threat – it’s not been a good few months for them as far as international publicity is concerned, and Google is a big economic player whose favour I suspect they’d rather not lose. But China’s people will be seriously miffed about it, and I that’s what makes me think that Google are far more cunning than they’re letting on. I’m not under the illusion that they’re interested in anything more than running a profitable business (though that whole “don’t be evil” thing is a pretty effective rule-of-thumb for achieving such), and bringing down totalitarian governments isn’t in their regular remit. But look at it this way: if you were running a business of that size and looking at a potential market that lucrative, and you saw a way to potentially open up the laws that currently restrict your business in that market by playing off the market’s citizens (and international public opinion) against the government, and you reckoned you could pull it off…

OK, so I’m hypothesising wildly here, but my point is that it’s by no means completely implausible. I’m reminded of Jason Stoddard’s points about the mythical bugbear of evil corporate hegemony:

A corporation doesn’t care if you’re living in a 300 square foot studio apartment or a 6000 square foot McMansion. They don’t want to wipe out the McMansion dwellers, or elevate the studio apartment owners. They only care about one thing: that you buy their stuff.

For everything they do, they’ll have justification. There’s no hidden business plan with a top-line mission statement of “Destroying Civilization As We Know It.”

But there will be hundreds or thousands of decisions, all based on maximizing profit. Substituting cheaper ingredients: maximize profit. Use low-income countries for labor: maximizing profit. Driving smaller competitors out of business: ensuring growth, which maximizes profit. Extending credit to anyone: maximizes profit.

If they can make a bigger profit selling you a “green” condo and a Prius rather than a McMansion and an Escalade, that’s exactly what they’ll do. If they think they’ll make an even larger profit renting you an apartment and leasing you a bike, that’s what they’ll do.

Google stand to make a lot of money if they can loosen the government leash in China, right? Right… so keep your eyes on the dollar signs. This story isn’t over yet, I suspect.

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