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How Google took on China—and lost

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Conceptual illustration containing a pagoda and dragonfly and technological elements

Google's first foray into Chinese markets was a short-lived experiment. Google China’s search engine was launched in 2006 and abruptly pulled from mainland China in 2010 amid a major hack of the company and disputes over censorship of search results. But in August 2018, the investigative journalism website The Intercept reported that the company was working on a secret prototype of a new, censored Chinese search engine, called Project Dragonfly. Amid a furor from human rights activists and some Google employees, US Vice President Mike Pence called on the company to kill Dragonfly, saying it would “strengthen Communist Party censorship and compromise the privacy of Chinese customers.” In mid-December, The Intercept reported that Google had suspended its development efforts in response to complaints from the company's own privacy team, who learned about the project from the investigative website's reporting.

Observers talk as if the decision about whether to reenter the world’s largest market is up to Google: will it compromise its principles and censor search the way China wants? This misses the point—this time the Chinese government will make the decisions.

Google and China have been locked in an awkward tango for over a decade, constantly grappling over who leads and who follows. Charting that dance over the years reveals major shifts in China’s relationship with Google and all of Silicon Valley. To understand whether China will let Google back in, we must understand how Google and China got here, what incentives each party faces—and how artificial intelligence might have both of them dancing to a new tune.  

The right thing to do?

When www.google.cn launched in 2006, the company had gone public only two years before. The iPhone did not yet exist, nor did any Android-based smartphones. Google was about one-fifth as large and valuable as it is today, and the Chinese internet was seen as a backwater of knockoff products that were devoid of innovation. Google’s Chinese search engine represented the most controversial experiment to date in internet diplomacy. To get into China, the young company that had defined itself by the motto “Don’t be evil” agreed to censor the search results shown to Chinese users.

Central to that decision by Google leadership was a bet that by serving the market—even with a censored product—they could broaden the horizons of Chinese users and nudge the Chinese internet toward greater openness.

At first, Google appeared to be succeeding in that mission. When Chinese users searched for censored content on google.cn, they saw a notice that some results had been removed. That public acknowledgment of internet censorship was a first among Chinese search engines, and it wasn’t popular with regulators.

“The Chinese government hated it,” says Kaiser Kuo, former head of international communications for Baidu. “They compared it to coming to my house for dinner and saying, ‘I will agree to eat the food, but I don’t like it.’” Google hadn’t asked the government for permission before implementing the notice but wasn’t ordered to remove it. The company’s global prestige and technical expertise gave it leverage. China might be a promising market, but it was still dependent on Silicon Valley for talent, funding, and knowledge. Google wanted to be in China, the thinking went, but China needed Google.

Google’s censorship disclaimer was a modest victory for transparency. Baidu and other search engines in China soon followed suit. Over the next four years, Google China fought skirmishes on multiple fronts: with the Chinese government over content restrictions, with local competitor Baidu over the quality of search results, and with its own corporate leadership in Mountain View, California, over the freedom to adapt global products for local needs. By late 2009, Google controlled more than a third of the Chinese search market—a respectable share but well below Baidu’s 58%, according to data from Analysys International.

The Chinese government cracked down on political speech in 2013, imprisoning critics and instituting new laws against “spreading rumors” online—a one-two punch that suffocated political discussion.

In the end, though, it wasn’t censorship or competition that drove Google out of China. It was a far-­reaching hacking attack known as Operation Aurora that targeted everything from Google’s intellectual property to the Gmail accounts of Chinese human rights activists. The attack, which Google said came from within China, pushed company leadership over the edge. On January 12, 2010, Google announced, “We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all.”

The sudden reversal blindsided Chinese officials. Most Chinese internet users could go about their online lives with few reminders of government controls, but the Google announcement shoved cyberattacks and censorship into the spotlight. The world’s top internet company and the government of the most populous country were now engaged in a public showdown.

“[Chinese officials] were really on their back foot, and it looked like they might cave and make some kind of accommodation,” says Kuo. “All of these people who apparently did not give much of a damn about internet censorship before were really angry about it. The whole internet was abuzz with this.”

But officials refused to cede ground. “China welcomes international Internet businesses developing services in China according to the law,” a foreign ministry spokeswoman told Reuters at the time. Government control of information was—and remains—central to Chinese Communist Party doctrine. Six months earlier, following riots in Xinjiang, the government had blocked Facebook, Twitter, and Google’s YouTube in one fell swoop, fortifying the “Great Firewall.” The government was making a bet: China and its technology sector did not need Google search to succeed.

Google soon abandoned google.cn, retreating to a Hong Kong–based search engine. In response, the Chinese government decided not to fully block services like Gmail and Google Maps, and for a while it allowed sporadic access from the mainland to the Hong Kong search engine too. The two sides settled into a tense stalemate.

Google’s leaders seemed prepared to wait it out. “I personally believe that you cannot build a modern knowledge society with that kind of [censorship],” Google chairman Eric Schmidt told Foreign Policy in 2012. “In a long enough time period, do I think that this kind of regime approach will end? I think absolutely.”

Conceptual illustration depicting innovators returning to China

Role reversal

But instead of languishing under censorship, the Chinese internet sector boomed. Between 2010 and 2015, there was an explosion of new products and companies. Xiaomi, a hardware maker now worth over $40 billion, was founded in April 2010. A month earlier Meituan, a Groupon clone that turned into a juggernaut of online-to-offline services, was born; it went public in September 2018 and is now worth about $35 billion. Didi, the ride-­hailing company that drove Uber out of China and is now challenging it in international markets, was founded in 2012. Chinese engineers and entrepreneurs returning from Silicon Valley, including many former Googlers, were crucial to this dynamism, bringing world-class technical and entrepreneurial chops to markets insulated from their former employers in the US. Older companies like Baidu and Alibaba also grew quickly during these years.

In 2017, the government launched a new crackdown on virtual private networks, software widely used for circumventing censorship.

The Chinese government played contradictory roles in this process. It cracked down on political speech in 2013, imprisoning critics and instituting new laws against “spreading rumors” online—a one-two punch that largely suffocated political discussion on China’s once-raucous social-media sites. Yet it also launched a high-profile campaign promoting “mass entrepreneurship and mass innovation.” Government-funded startup incubators spread across the country, as did government-backed venture capital.

That confluence of forces brought results. Services like Meituan flourished. So did Tencent’s super-app WeChat, a “digital Swiss Army knife” that combines aspects of WhatsApp, PayPal, and dozens of other apps from the West. E-commerce behemoth Alibaba went public on the New York Stock Exchange in September 2014, selling $25 billion worth of shares—still the most valuable IPO in history.

Amidst this home-grown success, the Chinese government decided to break the uneasy truce with Google. In mid-2014, a few months before Alibaba’s IPO, the government blocked virtually all Google services in China, including many considered essential for international business, such as Gmail, Google Maps, and Google Scholar. “It took us by surprise, as we felt Google was one of those valuable properties [that they couldn’t afford to block],” says Charlie Smith, the pseudonymous cofounder of GreatFire, an organization that tracks and circumvents Chinese internet controls.

The Chinese government had pulled off an unexpected hat trick: locking out the Silicon Valley giants, censoring political speech, and still cultivating an internet that was controllable, profitable, and innovative.

AlphaGo your own way

With the Chinese internet blossoming and the government not backing down, Google began to search for ways back into China. It tried out less politically sensitive products—an “everything but search” strategy—but with mixed success.

In 2015, rumors swirled that Google was close to bringing its Google Play app store back to China, pending Chinese government approval—but the promised app store never materialized. This was followed by a partnership with Mobvoi, a Chinese smart-watch maker founded by an ex-Google employee, to make voice search available on Android Wear in China. Google later invested in Mobvoi, its first direct investment in China since 2010.

In March 2017, there were reports that authorities would allow Google Scholar back in. They didn’t. Reports that Google would launch a mobile-app store in China together with NetEase, a Chinese company, similarly came to naught, though Google was permitted to relaunch its smartphone translation app.

Then, in May 2017, a showdown between AlphaGo, the Go-playing program built by Google sibling company DeepMind, and Ke Jie, the world’s number one human player, was allowed to take place in Wuzhen, a tourist town outside Shanghai. AlphaGo won all three games in the match—a result that the government had perhaps foreseen. Live-streaming of the match within China was forbidden, and not only in the form of video: as the Guardian put it, “outlets were banned from covering the match live in any way, including text commentary, social media, or push notifications.” DeepMind broadcast the match outside China.

During this same period, Chinese censors quietly rolled back some of the openings that Google’s earlier China operations had catalyzed. In 2016, Chinese search engines began removing the censorship disclaimers that Google had pioneered. In 2017, the government launched a new crackdown on virtual private networks (VPNs), software widely used for circumventing censorship. Meanwhile, Chinese authorities began rolling out extensive AI-powered surveillance technologies across the country, constructing what some called a “21st-century police state” in the western region of Xinjiang, home to the country’s Muslim Uighurs.

Despite the retrograde climate, Google capped off 2017 with a major announcement: the launch of a new AI research center in Beijing. Google Cloud’s Chinese-born chief scientist, Fei-Fei Li, would oversee the new center. “The science of AI has no borders,” she wrote in the announcement of the center’s launch. “Neither do its benefits.” (Li left Google in September 2018 and returned to Stanford University, where she is a professor.)

If the research center was a public symbol of Google’s continued efforts to gain a foothold in China, Google was also working quietly to accommodate Chinese government restrictions. Dragonfly, the censored- search-engine prototype, which has been demonstrated for Chinese officials, blacklists key search terms; it would be operated as part of a joint venture with an unnamed Chinese partner. The documents The Intercept obtained said the app would still tell users when results had been censored.

Other aspects of the project are particularly troubling. Prototypes of the app reportedly link users’ searches to their mobile-phone number, opening the door to greater surveillance and possibly arrest if people search for banned material.

In a speech to the Dragonfly team, later leaked by The Intercept, Ben Gomes, Google’s head of search, explained Google’s aims. China, he said, is “arguably the most interesting market in the world today.” Google was not just trying to make money by doing business in China, he said, but was after something bigger. “We need to understand what is happening there in order to inspire us,” he said. “China will teach us things that we don’t know.”

In early December, Google CEO Sundar Pichai told a Congressional committee that "right now we have no plans to launch in China," though he would not rule out future plans. The question is, if Google wants to come back to China, does China want to let it in?

China’s calculus

To answer that question, try thinking like an advisor to President Xi Jinping.

Bringing Google search back certainly has upsides. China’s growing number of knowledge workers need access to global news and research, and Baidu is notoriously bad at turning up relevant results from outside China. Google could serve as a valuable partner to Chinese companies looking to expand internationally, as it has demonstrated in a patent-sharing partnership with Tencent and a $550 million investment in e-commerce giant JD. Google’s reentry would also help legitimize the Communist Party’s approach to internet governance, a signal that China is an indispensable market—and an open one—as long as you “play by the rules.”

Google’s exit in 2010 marked a major loss of face for the Chinese government. If leaders give the green light to Project Dragonfly, they run that risk again.

But from the Chinese government’s perspective, these potential upsides are marginal. Chinese citizens who need to access the global internet can still usually do so through VPNs (though it is getting harder). Google doesn’t need to have a business in China to help Chinese internet giants gain business abroad. And the giants of Silicon Valley have already ceased their public criticism of Chinese internet censorship, and instead extol the country’s dynamism and innovation.

By contrast, the political risks of permitting Google to return loom large to Xi and his inner circle. Hostility toward both China and Silicon Valley is high and rising in American political circles. A return to China would put Google in a political pressure cooker. What if that pressure—via antitrust action or new legislation—effectively forced the company to choose between the American and Chinese markets? Google’s sudden exit in 2010 marked a major loss of face for the Chinese government in front of its own citizens. If Chinese leaders give the green light to Project Dragonfly, they run the risk of that happening again.

A savvy advisor would be likely to think that these risks—to Xi, to the Communist Party, and to his or her own career—outweighed the modest gains to be had from allowing Google’s return. The Chinese government oversees a technology sector that is profitable, innovative, and driven largely by domestic companies—an enviable position to be in. Allowing Google back in would only diminish its leverage. Better, then, to stick with the status quo: dangle the prospect of full market access while throwing Silicon Valley companies an occasional bone by permitting peripheral services like translation.

Google’s gamble

Google does have one factor in its favor. If it first entered China during the days of desktop internet, and departed at the dawn of the mobile internet, it is now trying to reenter in the era of AI. The Chinese government places high hopes on AI as an all-purpose tool for economic activity, military power, and social governance, including surveillance. And Google and its Alphabet sibling DeepMind are the global leaders in corporate AI research.

This is probably why Google has held publicity stunts like the AlphaGo match and an AI-powered “Guess the Sketch” game on WeChat, as well as taking more substantive steps like establishing the Beijing AI lab and promoting Chinese use of TensorFlow, an artificial-intelligence software library developed by the Google Brain team. Taken together, these efforts constitute a sort of artificial-intelligence lobbying strategy designed to sway the Chinese leadership.

This pitch, however, faces problems on at least three battlegrounds: Beijing; Washington, DC; and Mountain View, California.

Chinese leaders have good reason to feel they’re already getting the best of both worlds. They can take advantage of software development tools like TensorFlow and they still have a prestigious Google research lab to train Chinese AI researchers, all without granting Google market access.

In Washington, meanwhile, American security officials are annoyed that Google is actively courting a geopolitical rival while refusing to work with the Pentagon on AI projects because its employees object to having their work used for military ends.

Those employees are the key to the third battleground. They’ve demonstrated the ability to mobilize quickly and effectively, as with the protests against US defense contracts and a walkout last November over how the company has dealt with sexual harassment. In late November more than 600 Googlers signed an open letter demanding that the company drop the Dragonfly project, writing, “We object to technologies that aid the powerful in oppressing the vulnerable.” Daunting as these challenges sound—and high as the costs of pursuing the Chinese market may be—they haven’t entirely deterred Google’s top brass. Though the development of Dragonfly appears to have, at the very least, paused, the wealth and dynamism that make China so attractive to Google also mean the decision of whether or not to do business there is no longer the company’s to make.

“I know people in Silicon Valley are really smart, and they’re really successful because they can overcome any problem they face,” says Bill Bishop, a digital-media entrepreneur with experience in both markets. “I don’t think they’ve ever faced a problem like the Chinese Communist Party.”

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Why Google Quit China—and Why It’s Heading Back

When American Internet companies do business abroad, they are sometimes forced to do a repressive government’s dirty work.

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When Google shut down its Chinese search engine in 2010, it gave up access to an enormous market. There are more than twice as many people on the Internet in China as there are residents in the U.S., and the number of Chinese Internet users is growing at a rate that far surpasses that of any other country. Google has plans to return to China in the near future, but why did it turn away from the country for so long?

Censorship is why. Google effectively shut down its Chinese operations after it discovered a cyberattack from within the country that targeted it and dozens of other companies. And while investigating the attack, Google found that the Gmail accounts of a number of Chinese human-rights activists had been hacked.

Google had set up shop in China four years before the breach, offering a version of its services that conformed to the government’s oppressive censorship policies. At the time, Google officials said they’d decided that the most ethical option was to offer some services—albeit restricted by China’s censors—to the enormous Chinese market, rather than leave millions of Internet users with limited access to information.

But the 2010 attacks prompted the company to reverse course. Instead of complying with government requests to filter its search results, Google directed all of its Chinese traffic to the uncensored Hong Kong version of its search engine, a move that left the company vulnerable to being completely shut down in China. Indeed, Google’s services became inaccessible to most Chinese users within months.

Google’s move to pull the plug in China is an extreme example of the kinds of decisions Internet companies operating abroad are often up against: If they want to do business, they have to abide by local laws, which can include restrictions on speech. And since the United States has some of the most permissive freedom-of-speech laws in the world, American companies must adapt in order to do business even in parts of the world that are culturally very similar to the U.S.

Western European countries, which receive top marks from Freedom House for online openness, are far less tolerant than the U.S. of hateful speech and images. In Germany, where distributing swastikas is considered hate speech and is illegal, regulators recently investigated a complaint that Facebook was not adequately enforcing national hate-speech law. But it’s inconceivable that Facebook would close down its service in Germany just because the government asks for more censorship than the First Amendment would permit.

In countries with more repressive governments, companies routinely receive requests to take down a much wider range of content that violates local laws. In Russia, for example, speaking ill of public officials can lead to costly libel suits; just across the Black Sea, “insulting Turkishness” is punishable by fines and jail time.

Lee Rowland, a senior staff attorney at the American Civil Liberties Union, says companies should generally submit to governments’ requests for censorship, if it means they can keep delivering their services. But when they take down content from their platform, Rowland says, the company must be transparent.

“If these companies do whatever they’re capable of doing to publicize that their content is being screened, monitored, and sometimes censored by governments, I think there’s a really good argument that maintaining a social-media presence is inherently a liberalizing force,” Rowland said.

To that end, Google , Facebook , and Twitter all publish a detailed annual transparency report, where they show the number and type of content-takedown or user-information requests they received, and the number they complied with, from each country where they operate. The companies also lay out their rationale for dealing with these requests: Facebook, for example, says it checks every incoming request for “legal sufficiency” and “reject[s] or require[s] greater specificity on requests that are overly broad or vague.” But even the most thorough transparency report can be difficult to access in the countries where the reported censorship is taking place.

Rebecca MacKinnon, a prominent Internet-privacy advocate at New America, says companies should start thinking about how they will deal with free-speech issues even before they start doing business in a repressive state. “It’s about anticipating in advance what positions you’re going to be put in, and deciding in advance whether that’s an acceptable position to be in,” MacKinnon said. Many companies undergo a “human-rights impact assessment” before they expand to a new market with potential censorship pitfalls.

The calculus that goes into making decisions about free speech abroad is complicated. But there are few things that companies can do to push back against censorship-happy governments without losing access to an entire country.

Companies can set up stringent review processes for legal takedown requests. A stringent review can make sure governments aren’t taking advantage of Internet companies to censor content outside the bounds of the law, and thorough reporting and transparent policies can spur local activism to change repressive laws.

Twitter is an interesting test case. As with any company, its tolerance for complying with government requests can be gleaned from its actions. Twitter’s transparency report shows a sharp rise in takedown requests in 2015, driven in large part by a high volume of requests from Turkey and Russia; the company continues to operate in both of those countries.

In Iran, however, where Twitter has been blocked for more than five years, Twitter has made changes to accommodate Iranian users that are able to circumvent their government’s Internet filters. The company recently began allowing users with Iranian phone numbers to activate two-factor authentication, a login option which can protect accounts from being hacked. Rowland called Twitter’s actions in Iran the “ethical high-water mark for resisting government attempts to censor access to content.”

(A Twitter spokesperson declined to comment on the company’s legal and business decision-making, and spokespeople for Google and Facebook were not available to comment on this story.)

When deciding how to deal with censorship abroad, companies aren’t going at it alone. The Global Network Initiative, a privacy and digital human-rights organization, provides a roadmap for companies navigating business in repressive legal environments. GNI members represent for-profit companies—including Google and Facebook—investors, and nonprofit and academic organizations.

MacKinnon, who was a founding member of GNI and sits on its board, says the organization provides a space for companies who are up against tough choices to confer with other members, academics, and privacy advocates, in order to make informed decisions. But she says most companies are too preoccupied chasing short-term profits to put too much time and energy into implementing long-term free-speech protections. “GNI has at least put a framework in place that’s preventing things from being much worse than they’d otherwise be,” MacKinnon said.

Companies that do business abroad—even just in Europe—are dealing with an increasing number of government requests for content takedowns every year. Europe’s two-year old “right to be forgotten,” a European Union decision that allows citizens to ask Google to remove links to misleading, inaccurate, or irrelevant information about them, has opened a whole new category of content takedown requests. And growing worry that terrorist groups like the Islamic State are using social platforms to recruit and spread propaganda means that more governments are on the lookout for content that promotes terrorism, which typically violates platforms’ terms of service.

But while terms-of-service violations can result in bans and content takedowns, most Internet companies don’t report them in their transparency reports. This is a problem, says Rowland, because a government that’s particularly active in flagging terms-violating content for removal is essentially engaging in a different form of censorship.

The United Kingdom, for example, has taken special advantage of flagging tools, and at least one counter-terrorism unit in the U.K. government has been granted “super-flagger” status to request YouTube video takedowns, allowing it to flag violations en masse.

One reason some companies don’t report takedowns of content that violates their terms of service is because they can’t tell which requests come from governments. A spokesman for Twitter said governments are required to use the same mechanism for flagging tweets, photos, and accounts as the general public must use. The spokesperson said requests for takedowns based on terms-of-service violations are “very rare.”

Even as requests for takedowns increase every year, companies are engaging more and more with the governments that issue them. Take China: Google is hiring for dozens of positions there as it prepares its reentry, and is working toward an agreement to offer an app store for Android devices that would only include government-approved apps. In Pakistan, Google launched a localized version of YouTube last week that will adhere to local law, in a bid to get the government to lift a ban on the service.

These expansions will allow Google access to a large number of Internet users, delivering them more information, and at the same time bolstering the company’s bottom line. But for the millions of Internet users in China, Pakistan, and other places where censorship is the norm, the tradeoff for getting to use new services remains the same: Easily accessible information comes at the cost of continued government control, filtered through American Internet companies.

We want to hear what you think about this article. Submit a letter to the editor or write to [email protected].

google china censorship case study

google china censorship case study

Google’s censored Chinese search engine: a catalogue of ethical violations?

google china censorship case study

Reader in Computing & Social Responsibility, De Montfort University

Disclosure statement

Catherine Flick receives funding from the European Union Horizon 2020 Framework Programme under grant agreements 710543 and 787991. She is affiliated with the Association of Computing Machinery as a member of its Committee on Professional Ethics and a member of the steering committee of the Code of Ethics update taskforce.

De Montfort University provides funding as a member of The Conversation UK.

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The Great Firewall of China is the largest-scale internet censorship operation in the world. The Chinese state says the firewall is there to promote societal harmony within an increasing population of billions of people. It considers the internet in China as part of its sovereign territory .

Eight years ago, Google withdrew from China , pulling its search and other services out because of country’s limits to freedom of speech. But it is now planning to relaunch a heavily censored version of its services in China, according to a whistleblower who spoke to online news website The Intercept .

This project, named Dragonfly, will encompass a new, heavily censored version of Google’s search services, including mobile apps, that will be run in partnership with a local company in China. Censorship in China includes returning no results for searches that depict Chinese police or military brutality (such as the Tiananmen Square massacre), pro-democracy sites, sites linked with the Dalai Lama, and anything related to Taiwanese or Tibetan independence.

The whistleblower who spoke to The Intercept cited ethical concerns over this project – and rightly so. There are several ethical dilemmas with Google’s move back into China. Should large Western companies such as Google give up ethical values to make money in China? Is it okay to design technology to assist the Chinese government in restricting the human rights of their citizens? Where does “respect for Chinese values” turn into “assistance in oppressing Chinese people through censorship”? Is Google being hypocritical by making money on the freedom of information available in most societies but then selling it out when they go into China?

The largest professional organisation for computing, the Association of Computing Machinery, recently updated its code of ethics , which includes some specific provisions that we can use to think through these issues. Many Google employees are members of the ACM, meaning they have agreed to abide by this code. Some of these employees may be working on Project Dragonfly, so they will need to evaluate their work in terms of the code. An initial analysis using the code (and this complex case requires more than space allows) offers three insights.

First, the primary goal of technology development should be to benefit the public good, “to contribute to society and to human well-being”, “promoting human rights and protecting each individual’s right to autonomy” (principle 1.1). Taking part in censorship at the Chinese state’s behest and censoring the topics mentioned above would appear to be inconsistent with this principle.

Individual freedom is heavily curtailed in China, and this is reflected in the censorship of the internet there. But, despite what the Chinese government argues, promoting social harmony doesn’t require the restriction of freedom or violation of human rights.

google china censorship case study

Second, there are specific provisions within the code against assisting in the oppression of a population within the code. “Computing professionals should take action to avoid creating systems or technologies that disenfranchise or oppress people” (principle 1.4). In developing technology to censor sites related to democracy and Chinese-committed atrocities, Google employees would arguably be violating this as well.

But surely this is a case for respecting “local, regional, national, and international laws and regulations” (principle 2.3)? The code of ethics expects computing professionals to challenge unethical rules – and break them if a rule “has an inadequate moral basis or causes recognisable harm”.

It’s also one thing to respect local customs and laws, and another to actively implement them, as Google will be doing. By collaborating, Google, as a large Western company, stands accused of giving credence to these oppressive laws. providing the Chinese state with political weight and propaganda for their policies.

Betraying its values?

It would be highly hypocritical of Google to take advantage of the values that have allowed it to grow to the behemoth it is today in much of the world – democracy, freedom of speech, personal autonomy == and then drop these when moving into the Chinese market. Instead of being a values-driven company, it seems from this move that it is purely profit-driven.

So what should Google do? One way of responsibly dealing with this would be to open up project Dragonfly to input from the rest of the company, not just the hundred or so working directly on it. Let the Google employee base and other non-shareholder stakeholders decide where the red lines for Google’s values should be.

Research has indicated that ethical companies are more profitable, retaining employees who are proud to work for the company, and earning respect and loyalty from the public. Standing up and showing China the value of democratic participation in company value identification will likely earn Google more respect both home and abroad.

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Looking Behind Google’s Stand in China

  • China has become more emboldened and self-confident as a result of its increasing economic significance.
  • Google acted precipitously without giving due consideration to the impact of its announcement on stakeholders.
  • The Google issue has become a cause célèbre that exacerbates the already fragile and festering U.S.-China relationship.

Google, the "do no evil" company, gained entry into the Chinese search engine market last decade by agreeing to ban search results on topics deemed sensitive by the Chinese government. To Google's way of thinking, it could do more good for Internet freedom and the cause of human rights by working inside the country to create value for its Chinese users, employees, and business partners. To critics, Google was selling out its core principles to play in the world's second largest economy.

“Google shot themselves in the foot without gaining the moral high ground."

So it was a shocking turn of events on January 12 when Google announced it would pull up stakes in China unless the country agreed to stop censoring search. The precipitating event: an unsuccessful cyber attack from inside China attempting to burrow into the Gmail accounts of Chinese dissidents. Since the announcement, little has transpired publicly; the two sides are presumably negotiating.

Who are the winners and losers here? Has China been taught a lesson? Has Google been outfoxed? What can other companies learn from this collision of cultures?

Harvard Business School professor John A. Quelch and research associate Katherine E. Jocz have just published a case study, titled Google in China (Case 9-510-071), based on public sources, that delves into some of these issues. We talked with Quelch last week.

Sean Silverthorne: Some see this as a heroic effort by Google to live up to its "do no evil" pillar. But others note the company is turning its back on its Chinese employees, users, partners, and an incredibly large market opportunity that would benefit Google shareholders. What's your view?

John A. Quelch: Google acted precipitously without giving due consideration to the impact of the announcement on stakeholders, including their Chinese employees, consumers, and business partners.

Google's justification is that they are putting a stake in the ground on behalf of human rights. If Google is forced out of China, this could become a rallying cry for Internet freedom worldwide, to the benefit of the Google brand. And eventually, the Chinese regime might change to a more democratic form of government, in which case Google's stand might go down in history as one of seminal moments on China's road to democracy.

But this upside for Google is relatively speculative. The immediate downside consequences are more certain. Google has some 700 employees in China, the best of whom are already finding alternative employment. So de facto, Google is going to be a much smaller entity in China. It seems unlikely to me that many talented Chinese will be lining up for jobs at Google in China going forward.

Google's announcement has also disrupted the plans of a number of important business partners such as Samsung and Motorola, who were all set to launch Android-platform handsets in China. I doubt those partners were notified ahead of time.

Q: OK then, why did Google take this course of action?

A: The hacking incident was probably the last straw in a rather long line of issues.

Sooner or later, Google had to stand up for its principles. They have always been at odds internally as to whether or not being in China, operating a self-censorship approach, is consistent with their "do no evil" philosophy.

Add to this the business fact that only 1 percent of their revenues come from China. There is no reason to suppose that they were going to do any better by being cooperative with the Chinese government.

Interestingly, a resolution had been reached in the prior week on a separate matter involving the China Written Works Copyright Society, which accused Google of failure to inform or pay authors of books it was digitizing. Google issued an apology. My suspicion is there was thought to be a quid pro quo due from the Chinese that failed to materialize.

Q: One point made by your case, perhaps missed by Google, is that companies doing business abroad must be able to see the world through the eyes of the host government.

A: The Chinese government was taken aback by the Google announcement. True to form, they responded very cautiously initially, while they deliberated what to do. The initial Chinese response came from a mid-level spokesperson at the Foreign Ministry, while the initial response from the United States government came from the secretary of state herself—and that perhaps elevated the conflict.

“China certainly is not going to change its ways because of a threat from Google."

Now the Google issue has become a cause célèbre that encapsulates and exacerbates the already fragile and festering U.S.-China relationship. On the other hand, the concern over human rights in China is a big deal for many in the Western world.

The Chinese argue that they allow and support free information flow over the Internet with some restrictions. They contend that the United States doesn't feel any discomfort hacking into the Internet traffic of U.S. citizens who are suspected terrorists in the United States. Rightly or wrongly, the Chinese view the political dissidents and Falun Gong activists whom they attempt to track as equivalent.

Q: It was interesting that no other companies backed Google in this dispute. Microsoft CEO Steve Ballmer called it "Google's problem."

A: Google's announcement was self-confident and unilateral, but they have the market capitalization to back it up.

Among multinationals doing business in China, many others have endured cyber attacks on their private networks, although it is unlikely those attacks had the same human rights implications as the attacks on Google.

Multinationals doing business in China have been almost universal in their unwillingness to publicly support Google. Their view is that Google has needlessly upset the apple cart for everybody else. For many of these multinationals, China is or will soon be their second most important market in the world. That is not true of Google.

Q: If Google is forced to exit China, will it be a blow financially?

A: I don't think so, although they were looking to make progress in China with other lines of business, such as the Android mobile phone platform.

Q: Do you think Google has at least won the PR war here, and raised the flag of human rights in China?

A: Not yet. Today Google is still self-censoring content exactly the same way as they were on January the eleventh. So Google has shot itself in the foot without gaining the moral high ground.

How can you impress your customers and supporters around the world through this announcement if you don't actually follow through?

Q: Best guess: Will this dispute be resolved, or will Google be forced to keep its word and abandon China? Does China need Google more than Google needs China?

A: The Chinese cannot permit Google's public challenge to go unpunished. However, they need not do anything, as the leading employees of Google China are jumping ship to take jobs with Baidu and other competitors. Google will soon be down to a skeleton shift in China and, if they are permitted to stay, they will have a tough time recruiting new employees.

Q: Are there lessons here for other multinationals doing business in emerging economies?

A: Government relations are critical to business effectiveness in developed as well as in emerging economies. But, in emerging economies, where the public sector and government-controlled enterprises are usually a higher percentage of GDP, managing government relations at the national, provincial, and local levels is even more important.

You have to know what you are getting into. You have to know whom you are dealing with, what their expectations are, what their rules are. And you either have to operate on a "when in Rome do as the Romans do" policy, or, if you have a clear set of global values that cannot be compromised, you have to decide which countries are off limits.

The Foreign Corrupt Practices Act helps U.S. multinationals protect their employees from being compromised. But we have no rules of engagement that bear upon the defense of human rights of citizens in host countries in which our multinationals operate.

Q: What do you make of China's assertiveness of late, not only in the business sphere but in the political world as well?

A: China has become more emboldened and self-confident as a result of its increasing economic significance. China is reluctant to be badgered by Western companies or Western governments into changing its rules and regulations.

The Chinese do not yet understand international public relations and have perhaps too short-term a view. If they have power and are in the driver's seat today, they act very confident. If, on the other hand, they take a hit or two economically, they become more flexible. There is a very short-term transactional aspect to their diplomacy, which is reflected in their unwillingness to bend on these issues. They certainly are not going to change their ways because of a threat from Google.

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The Journey to Re-enter the Chinese Market: A Google Case

Student thesis : Master thesis

With the failure of complying with institutions, Google exited the Chinese market in 2010. To re-enter this potential biggest market, Google launched the Dragonfly project in 2018, a search engine that is compatible with the Chinese government’s censorship. The purpose of the study is to initiate strategies in terms of marketing, institutions and culture for its re-entry to the fierce competition of the technological environment and to investigate into the issue from consumers’ perspective. Presumably, millions of Chinese internet users vary in terms of awareness and attitude towards Google’s re-entry. This study explores the proper position for Google to cope with institutions and competitions in China’s business and culture context. It is specifically a case study of Google based on two surveys’ results from potential consumers of specific age ranges. The primary data from the survey demonstrates respondents’ searching engine using behavior and the existence of an information gap between the accessible information and desired information. Additionally, a certain percentage of respondents maintain a neutral or negative stance towards censorship and Google’s cultural impact. An analysis is further conducted to analyze how Google could collaborate with mobile phone producers, cope with institution systems and adapt to local culture. Therefore, by working with potential partners and adapting its offer to the market, the company might be able to succeed in starting again to re-enter the Chinese market. However, applying all these principles require both excellent timing and a great understanding of the market, as well as an exceptional relationship with the local institutions.

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google china censorship case study

Google and the Government of China: A Case Study in Cross-Cultural Negotiations

  • By: Jeanne Brett & Christopher Grogan
  • Publisher: Kellogg School of Management
  • Publication year: 2006
  • Online pub date: January 02, 2018
  • Discipline: Business Ethics (general) , Far Eastern Business Studies , Business, Government, & Society
  • DOI: https:// doi. org/10.4135/9781526446992
  • Keywords: censorship , China , cross cultural studies , domain name , Google , negotiation , team negotiation Show all Show less
  • Contains: Content Partners | Teaching Notes Length: 2,877 words Region: Global , Eastern Asia Country: China Industry: Information service activities Originally Published In: Brett , J. , & Grogan , C. ( 2006 ). Google and the Government of China: A case study in cross-cultural negotiations . 5-406-752. Evanston, IL : Kellogg School of Management at Northwestern University . Organization: Google Type: Indirect case info Organization Size: Large info Online ISBN: 9781526446992 Copyright: © 2006 Kellogg School of Management, Northwestern University More information Less information

Teaching Notes

Supplementary resources.

The case is based on publicly reported events surrounding Google’s acquisition of its Chinese domain name (Google.cn). Both Google and the Chinese government seemed to struggle to find an outcome that would be acceptable to their constituents. On the one hand, Google sought to appease its shareholders while preserving its reputation for free access to information and the goodwill of its users. The Chinese government had to balance competing desires for access to cutting-edge search technology and the contribution of that technology to economic development with concern that liberal access to information would undermine its political-economic model.

The team of Google executives assigned to negotiate with Chinese government officials began to arrive at San Francisco International Airport two hours before their scheduled departure. 1 The seasoned team had been briefed on Chinese culture throughout the past two weeks by a special consultant retained for the negotiations. They had also been provided with an executive summary of press coverage on China and China’s most recent policy announcements regarding the Internet. The flight across the Pacific would give the executives valuable time to prepare for the negotiations concerning the acquisition of a Chinese domain name for Google and to reflect on just how far the company had come.

By the summer of 2005, Google had matured from a cutting-edge Silicon Valley start-up to emerge as one of the world’s Internet titans. In only eight years the brainchild of two Stanford University graduate students had transformed an industry and was generating impressive earnings from advertising and the licensing of its search engine technology. Google’s publicly traded stock had skyrocketed since it began trading a year before ( Exhibit 1 ). The company was admired for its audacious goals (nothing short of organizing and providing access to “the world’s information” 2 ), its corporate principles (famously and succinctly encapsulated in three words: “Don’t be evil” 3 ), and its healthy balance sheet. By combining a Microsoft-like aggressiveness, an Apple-esque zest for innovation, and seemingly rigid adherence to utopian ideals, Google had captivated its users, customers, and investors. The company’s flagship Web site, Google.com , stood among the most visited sites on the Internet ( Exhibit 2 ).

A company that sought to organize “the world’s information” would never be content with limiting its presence to the U.S. market. As Internet usage in other countries had grown, so had Google’s presence in those countries (for estimates of Internet usage in various countries, see Exhibit 3 ). Google had gradually expanded its geographic presence and established itself as one of the most visited sites in the world. During this expansion, it had added other domain names to assist non-American customers with their searches. These names, such as Google.fr for French users, could be viewed as brand extensions of the original Google.com , and captured a great number of international users. This in turn netted Google additional revenue. By 2005 nearly 40 percent of Google’s revenue and more than half its user traffic came from outside the United States (see Exhibit 4 and Exhibit 5 ). Google had also added a number of complementary services to its core search engine business, including both consumer and commercial applications (see Exhibit 6 for a partial list of Google’s other products and services). While the company had made strong inroads into Europe and Asia, the team of executives headed to Beijing was keenly aware that one market remained beyond their reach: China.

Though Google.com was periodically available to Chinese users, it did not provide reliable and efficient service to that market. The company had tried to protect its financial interest in the Chinese market by acquiring a stake in the Chinese search engine company Baidu, but Chinese law prohibited Google from holding more than a minority stake. Therefore, Google decided to expand its own presence in China. In the summer of 2005, plans for an expansion became more public—and appeared more concrete—after Google finally succeeded in hiring Dr. Kai-fu Lee away from Microsoft. Lee was a world-renowned computer scientist widely praised and highly regarded in China and among the Chinese high-tech community. Court documents made public during Google’s efforts to pull Lee away from Microsoft revealed that Google intended to establish a new Chinese research and development center supporting thirty to fifty engineers, headed by Lee. The executives on the flight were aware that these revelations had fueled speculation that Google was planning to establish a more permanent presence in China.

Although users in China could access any of Google’s censorship-free offshore sites (e.g., Google.com or Google.co.uk ), their searches were monitored by the Chinese government, and results found unacceptable were blocked by the censors. One notable example of this censorship was the difference in the results of searches for Tiananmen Square on Google.com and Baidu.cn (see Exhibit 7 and Exhibit 8 ). Because Google’s searches could return results deemed contrary to China’s interests, the government tried to block access to Google’s site. This interference slowed the Google site’s speed and actively interfered with its efficiency.

The Chinese government was able to accomplish this monitoring and blocking using its “Great Firewall,” a system “that includes a blacklist of foreign sites blocked in China and filters that can stop e-mail and make Web pages inaccessible if they contain certain keywords.” 4 China’s Great Firewall was the result of laws and regulations that required Chinese Internet service providers (ISPs) to extensively filter all Web sites for illegal information. Sites targeting the Chinese market therefore faced a choice: establish a server presence in China (and submit to state regulation on the front end of the search) or maintain an offshore server and force users to endure significant delays caused by the Firewall acting on the back end of the search. Google had operated offshore in an attempt to skirt Chinese law, so its users’ results had to pass through the Great Firewall on their way to and from the company’s offshore servers. Search results were slow, if not blocked entirely. Thus, to improve performance and its users’ experiences, Google desperately needed to place servers behind the Chinese firewall. Once its servers were located in China, Google’s search speed would be more competitive. Yet obstacles remained, and time was of the essence. Baidu was gaining momentum and Google’s management was very concerned about the possibility of losing market share. The executives began to formulate their negotiation strategy shortly after takeoff.

Google’s Perspective

The negotiations team had received a list of Google’s management’s concerns prior to leaving the company’s Mountain View, California, headquarters. Management wanted to enhance the company’s legitimacy with Chinese users, but knew doing so might be difficult for a company labeled as another Silicon Valley success story. China was a nationalistic culture, and the Chinese consumer was less willing to accept foreign brands when Chinese alternatives existed. As an example, Zhao Jing, a journalist well known for his provocative, political blogs about the Communist Party, was sharply criticized by some Chinese bloggers for moving his blog to an American site—MSN’s Spaces—instead of a Chinese blogging site. 5 The sooner Google could acquire a “.cn” domain name, the sooner it could distance itself from its American roots. Only then would it become a member of the “in-group.” 6 This in turn could lead to greater revenue streams from advertising to Chinese users.

However, Google’s goals were not all financial. One nonfinancial consideration concerned governmental regulation of the site through monitoring and filtering. Because the company’s primary goal was to satisfy users’ preferences for “instant gratification” 7 of their information needs, it opposed any interference that might slow down or restrict a user’s ability to retrieve information. This was a major motive for acquiring a “.cn” domain name. However, censorship could harm Google’s credibility among Chinese and non-Chinese users, which would conflict with its goal of building “the most loyal audience on the Web.” 8

Google’s management also would have to reconcile any action in China that could be viewed as censorship with its most famous principle: “Don’t be evil.” If Google were to agree to the level of censorship required by the Chinese authorities, it would likely face fierce criticism in the United States for appearing to act antithetically to its philosophy (see Exhibit 9 for excerpts from Google’s code of conduct). The Google negotiations team had witnessed the media furor that Yahoo had faced when it turned over information transmitted by Chinese users of its e-mail services to the Chinese government. That information was later used to sentence three cyberdissidents to prison terms ranging from three to ten years. 9

Yet even though the Google team would seek to avoid “evil” actions, the company’s policy also required it to comply with local laws and regulations. Google complied with requests from authorities not to list neo-Nazi sites returned in searches in France and Germany and not to list results in the United States that violated the U.S. Digital Millennium Copyright Act. Google’s adherence to these forms of state-mandated censorship demonstrated its willingness to abide by local laws.

The negotiations team had an alternative approach to entering the Chinese market, though it was not particularly attractive. The company could lobby China for access to a larger stake in Baidu. By upping its investment in a “homegrown” search engine company, Google could comply with the Chinese government’s regulations governing Internet firms, maintain an uncensored Google.com site, and maintain its integrity. However, access to Google.com would remain painfully slow, and the result would likely be user frustration and lost market share. Further, because of regulatory limitations in China, Google might not be able to obtain a controlling interest in Baidu. Without complete control over Baidu, Google’s revenue from China would be limited. Fortunately, Google’s negotiations team would be assisted by Dr. Lee, who had gained experience dealing with the Chinese government while working for Microsoft. He also brought with him an element of prestige as a result of the admiration that many Chinese scientists and programmers held for him.

China’s Perspective

After discussing its options, the negotiations team began to review its executive summary on China. The documents made it clear that the two parties would have different objectives during the negotiations. While the Google team would focus on profits and brand management, China would focus on a number of other considerations. The Chinese government had a goal of achieving technological parity with the United States, and consistently strove to provide its citizens and companies with access to the very best technology. Allowing Google to have a Chinese domain name and set up a research and support facility site in China would give some Chinese engineers access to Google’s proprietary research technology. This access might help curtail the “brain drain” (loss of technologically talented students and engineers to the United States and other countries) and create jobs for Chinese citizens. The possibility of retaining key talent might have been reinforced by the hiring of Dr. Lee, whose continued presence in the country might encourage other scientists and engineers to remain in China.

It was also clear that China’s leaders viewed the issue of Internet regulation (or censorship) as extremely important. They recognized how important Internet access and use was to China’s economic development, but also sought to control the Internet’s power. In order to squash dissent and limit political opposition, the government had long had a policy of strict media control. Content in newspapers, radio, television, and now the Internet was heavily controlled by the state, and these sources were prevented from reporting on or providing access to news deemed contrary to the Chinese government’s interests.

The report provided to the Google negotiations team noted China’s leaders’ desire to improve their nation’s economy while preserving political stability. This balancing act was conducted “bearing in mind the history and culture of China.” 10 In a September 2004 address to the Central Committee of the Communist Party, President Hu had warned that outsiders were attempting to westernize China. 11 The government was striving to prevent this process, and an unambiguous mode of doing so was to censor political discussions. The Internet was “unwittingly ushering an age of startling social change” in China, and the government was willing to employ censorship, including more than 30,000 Internet policemen to patrol the Internet, to put the brakes on it.

The summary also discussed China’s leaders’ bureaucratic efforts at self-preservation. Both the functionaries in the Internet Propaganda Management Department and the Ministry of Information Industry (which issued the Internet content provider [ICP] licenses) sought to please the party hierarchy to ensure their jobs and political longevity. The media had reported that despite initial hopes that President Hu would introduce democratic reforms, the president “has placed particular emphasis on tightening the party’s control over public opinion, presiding over a crackdown to restore discipline to state media and intimidate dissident intellectuals.” 12 Thus, it was firmly in the interest of the Chinese bureaucracy to insist that, as a condition of getting a license to establish a server within China, Google had to agree to censor its content and search results.

Finally, in restricting westernizing elements of the Internet through censorship, China could affirm its status as an independent actor in the global marketplace. As head of a hierarchical culture that valued status, the Chinese government sought to promote China as a powerful and independent actor in world forums. The government had in the past been critical of other Internet businesses that refused to follow its objectives and directives. For example, the online encyclopedia Wikipedia was completely banned in China until 2006 (see Exhibit 10 ). An anonymous post on the Wikipedia site claimed that Wikipedia’s users had been acting as “running dogs for American imperialism.” 13 “Running dog” is an expression in Mandarin that means servile follower or lackey. 14 Many Chinese suspected the post had been made by a government agent. The government would likely seek to prevent any loss of face that might accompany a decision to cave in to any of Google’s demands concerning Chinese law and the government’s official policy on the availability of information deemed contrary to the state’s best interests.

China had another option as well. Instead of allowing Google access to a “.cn” domain name, China could deny Google the license and continue to rely on local search engine alternatives to provide Chinese consumers with Internet searching services. Baidu had been steadily gaining market share, and was already one of the most visited sites in the world. It was a known entity and the Chinese government was already monitoring its compliance with Chinese law. The site was very similar in substance and style to Google. Though failure to bring a technologically advanced company such as Google to China would damage the regime’s international reputation, it would likely produce fewer domestic repercussions.

Searching for a Resolution

As the Google negotiators arrived in Beijing, several concerns lingered. Chief among them was how the team would be able to reconcile the company’s principles with its profit motives. The Chinese government officials assigned to negotiate with the Google team had concerns as well. Given the distance between the two parties on a number of important issues, neither party was confident that a deal would be reached. It would take a keen understanding of each other’s issues, positions, and interests to understand their motivations. Moreover, each party would have to understand how the culture of its counterpart might influence the outcome of the discussions. The Google team settled into its accommodations and prepared to meet with government officials later that day.

Preparation for the Classroom Discussion

  • 1. Develop a negotiations planning document using the Kellogg format in Exhibit 11 .
  • 2. Come to class prepared to support and explain the priorities that you see for the Chinese government and Google, and discuss their respective best alternative to a negotiated agreement (BATNAs). 15
  • 3. What ethical dilemmas do you foresee for Google? Is there any way to resolve them?
  • 4. Do you see any potential for an integrative agreement that creates value for both parties?

1. This case study originated as a paper drafted by Christopher Grogan ’07 and Lindsey Pohlmann, Northwestern University School of Law ’06; it was later adapted into a case by Professor Jeanne Brett and Christopher Grogan ’07.

2. Verne Kopytoff, “Google Bows to China Pressure,” San Francisco Chronicle, January 25, 2006.

4. Philip P. Pan, “The Click That Broke a Government’s Grip,” Washington Post , February 19, 2006.

5. Philip P. Pan, “Bloggers Who Pursue Change Confront Fear and Mistrust,” Washington Post , February 21, 2006.

6. See Jeanne M. Brett, Negotiating Globally (San Francisco, CA: Jossey-Bass, 2001), 16 (discussing the importance of belonging to the “in-group” in collectivist cultures, such as China).

7. http://www.google.com/intl/en/corporate/tenthings.html .

9. Nicholas D. Kristof, “China’s Cyberdissidents and the Yahoos at Yahoo,” New York Times , February 19, 2006.

10. James V. DeLong, “Google Is Right on China,” TCS Daily , January 31, 2006, http://www.tcsdaily.com .

11. Philip P. Pan, “Hu Tightens Party’s Grip on Power,” Washington Post , April 24, 2005.

13. Philip P. Pan, “Reference Tool on Web Finds Fans, Censors,” Washington Post , February 20, 2006.

14. Dictionary.com , available at: http://dictionary.reference.com/search?q=running%20dog .

15. See Roger Fisher, William Ury, and Bruce Patton, Getting to Yes (New York: Penguin Books, 1991).

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

The case studies on Sage Business Cases are designed and optimized for online learning. Please refer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides, or other resources that may be included.

Exhibit 1: Timeline of Key Events and Google’s Stock Price

Figure

Exhibit 2: Top Ten Most Popular Web Sites in the World, March 2006

  • 1. www.yahoo.com
  • 2. www.msn.com
  • 3. www.google.com
  • 4. www.baidu.com
  • 5. www.yahoo.co.jp
  • 6. www.sina.com.cn
  • 7. www.ebay.com
  • 8. www.sohu.com
  • 9. www.myspace.com
  • 10. www.qq.com

Source : http://www.alexa.com/site/ds/top_sites?ts_mode=global&lang=none .

Exhibit 3: Worldwide Internet Usage Rates

Source : http://www.internetworldstats.com/top20.htm .

Exhibit 4: Google’s Sources of Revenue ($)

Source : Google’s Third Quarter 2005 10-Q SEC Statement.

Exhibit 5: Google’s Revenue—United States vs. International (%)

Note : Google slightly revised its 2003 figures in its 2005 10-K filing. Moreover, it supplied additional data beginning in 2006 as to how much of its international revenue was earned in the United Kingdom. In 2003 earnings in the United Kingdom accounted for 10 percent of revenue, and rose to 13 and 14 percent in 2004 and 2005, respectively.

The growth in international revenues from the three and nine months ended September 30, 2004 to the three and nine months ended September 30, 2005 is the result of our efforts to provide search results to international users and deliver more ads from non-U.S. advertisers. We expect that international revenues will generally continue to grow as a percentage of our total revenues during 2005 and in future periods. While international revenues accounted for approximately 39% of our total revenues in the nine months ended September 30, 2005 and 33% in the nine months ended September 30, 2004, more than half of our user traffic during these periods came from outside the U.S.

Source: Google–s Third Quarter 2005 10-Q SEC Statement, p. 24 (emphases added).

Exhibit 6: Partial List of Google’s Services

Figure

Source : http://www.google.com/intl/en/options/ .

Exhibit 7: First Images Returned when Searching for “Tiananmen Square” on Google.com (accessed March 2006)

Figure

Exhibit 8: First Images Returned when Searching for “Tiananmen Square” on Baidu.cn (accessed March 2006)

Figure

Exhibit 9: Excerpts from Google’s Code of Conduct

Our informal corporate motto is “Don’t be evil.” We Googlers generally relate those words to the way we serve our users—as well we should. But being “a different kind of company” means more than the products we make and the business we’re building; it means making sure that our core values inform our conduct in all aspects of our lives as Google employees.

The Google Code of Conduct is the code by which we put those values into practice. This document is meant for public consumption, but its most important audience is within our own walls. This code isn’t merely a set of rules for specific circumstances but an intentionally expansive statement of principles meant to inform all our actions; we expect all our employees, temporary workers, consultants, contractors, officers and directors to study these principles and do their best to apply them to any and all circumstances which may arise.

The core message is simple: Being Googlers means striving toward the highest possible standard of ethical business conduct. This is a matter as much practical as ethical; we hire great people who work hard to build great products, but our most important asset by far is our reputation as a company that warrants our users’ faith and trust. That trust is the foundation upon which our success and prosperity rests, and it must be re-earned every day, in every way, by every one of us.

So please do read this code, and then read it again, and remember that as our company evolves, The Google Code of Conduct will evolve as well. Our core principles won’t change, but the specifics might, so a year from now, please read it a third time. And always bear in mind that each of us has a personal responsibility to do everything we can to incorporate these principles into our work, and our lives.

I. Serving Our Users

Google has always flourished by serving the interests of our users first and foremost. Our goal is to build products that organize the world’s information and make it accessible to our users. Here are several principles that all Googlers should keep in mind as we work toward that goal.

a. Usefulness

Our products, features and services should make Google more useful for our users, whether they’re simple search users or advertisers, large or small companies. We have many different types of users, but one primary goal for serving them all. “Is this useful?” is the one question every Googler should keep in mind during any task, every day.

Our communications with our users should be appropriately clear and truthful. Our reputation as a company our users can trust is among our most valuable assets, and it is up to all of us to make sure that we nourish that reputation.

c. Responsiveness

Part of being useful and honest is being appropriately responsive: recognizing relevant user feedback when we see it, and doing something about it. We take pride in responding to communications from our users, whether in the form of comments or questions, problems or compliments.

d. Taking Action

Saying that Google, and the products and services we produce, should be useful, honest and responsive is one thing; achieving that goal 100 percent of the time is, of course, quite another. That means that improving our work over time is largely contingent on the vigilance of our staff. Any time you feel our users aren’t being well served, don’t hesitate to bring it to the attention of the appropriate person. Googlers don’t sit back and say nothing when the interests of the user are at stake. When you feel it’s warranted, we encourage you to take a stand.

VII. Obeying the Law

Google takes its responsibilities to comply with the laws and regulations applicable to it very seriously. Although we recognize that it is probably impossible for you to understand all aspects of every applicable law, please take the time to try to generally familiarize yourself with the major laws and regulations that apply to your work and take advantage of our Legal Department to assist you and answer questions. We must all always remember that our reputation is the foundation of our present and future success—and that earning, and then maintaining, that reputation requires attention and effort to stay in compliance with the law.

a. The Foreign Corrupt Practices Act

Google requires full compliance with the Foreign Corrupt Practices Act, export control regulations, antitrust laws and other trade regulation statutes.

The Foreign Corrupt Practices Act prohibits any “corrupt” offer, payment, promise to pay, or authorization to pay any money, gift, or anything of value to any foreign official, or any foreign political party, candidate or official, for the purpose of: influencing any act or failure to act in the foreign official or party’s official capacity; or inducing the foreign official or party to use influence to affect a decision of a foreign government or agency, in order to obtain or retain business for anyone, or direct business to anyone.

What all does this legal jargon mean to you? Simply put: that any attempt on the part of any Google employee or contractor to bribe or otherwise unethically influence any United States or foreign official, in either the public or private sector, is probably illegal and regardless, is completely unacceptable and against Google’s Code of Conduct.

As always, though, there’s a gray area here: you should take great caution with any gifts or other inducements that could be perceived as bribes. That doesn’t mean all minor gifts or promotional and marketing materials are unacceptable (although, in general, government officials in the United States and in many other countries may be very reluctant to accept any gifts or items of value to avoid the appearance of impropriety); just that the care we all take to stay on the right side of ethical business practices also must be adhered to in the international arena.

Exhibit 10: Wikipedia’s Experience With the Chinese Government

Though users were able to access Wikipedia in China in October 2006, many pages remained blocked. There was speculation that the government of China was blocking only pages (as opposed to entire sites) deemed contrary to its interests.

Figure

Source : Loretta Chao, “Beijing Eases Ban on Wikipedia; Chinese-Language Filter Remains,” Wall Street Journal , October 17, 2006.

Exhibit 11: Planning Document

Directions: First identify the issues to be negotiated, putting each issue in a separate box in the issue column. In the Google column, identify Google’s position on each issue, then the interests underlying that position. After you have completed all the positions and issues for Google, prioritize the issues, with 1 being the most important. Follow the same steps to identify the positions, interests, and priorities for the Chinese government.

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Please note you do not have access to teaching notes, google in china: government censorship and corporate reputation.

Journal of Business Strategy

ISSN : 0275-6668

Article publication date: 8 May 2007

This paper examines the communication strategies organization, and tactics of Google as corporate executives and staff planned and began executing the company's global expansion strategy with entry into the Chinese market.

Design/methodology/approach

The paper takes the form of a case study.

To do business in the Chinese market, Google had to comply with Chinese Government censorship restrictions. The company's decision to do so was announced in the wake of Google's very recent refusal to provide user information to the US Government case against child pornography. Wall Street's response confirmed the profit potential of the venture, as the company's share price rose 3.6 percent in just one day, and continued rising to record heights. However, the company's announcement brought strong reaction from the press and human rights organizations. Within days, headlines were screaming across the USA and around the world, accusing Google of abandoning its principles in pursuit of profit.

Originality/value

Mass media in the USA and throughout the developed world heaped scorn and criticism on Google for its decision to censor searches from its servers inside China. Various NGOs took up the drumbeat of criticism, implying that Google could not be trusted with personal data, including search topics. At the same time, however, Wall Street continued to reward the company with a seemingly endless streak of record share price postings. The question appears simple: does the pursuit of profit in the developing world trump the need for ethics and values in business operations?

  • Corporate communications
  • Corporate image
  • Corporate identity
  • Information media
  • Public relations
  • Stakeholder analysis

O'Rourke, J.S. , Harris, B. and Ogilvy, A. (2007), "Google in China: government censorship and corporate reputation", Journal of Business Strategy , Vol. 28 No. 3, pp. 12-22. https://doi.org/10.1108/02756660710746229

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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Chinese National Residing in California Arrested for Theft of Artificial Intelligence-Related Trade Secrets from Google

Watch U.S. Attorney Ramsey's video statement here .

A federal grand jury indicted Linwei Ding, aka Leon Ding, charging him with four counts of theft of trade secrets in connection with an alleged plan to steal from Google LLC (Google) proprietary information related to artificial intelligence (AI) technology. The announcement was made by Attorney General Merrick B. Garland this afternoon while participating in a “Fireside Chat” at the American Bar Association’s 39th National Institute on White Collar Crime in San Francisco.

According to the indictment, returned on March 5 and unsealed earlier today, Ding, 38, a national of the People’s Republic of China and resident of Newark, California, transferred sensitive Google trade secrets and other confidential information from Google’s network to his personal account while secretly affiliating himself with PRC-based companies in the AI industry. Ding was arrested earlier this morning in Newark.

“The Justice Department will not tolerate the theft of artificial intelligence and other advanced technologies that could put our national security at risk,” said Attorney General Garland. “In this case, we allege the defendant stole artificial intelligence-related trade secrets from Google while secretly working for two companies based in China. We will fiercely protect sensitive technologies developed in America from falling into the hands of those who should not have them.”  

“While we work to responsibly harness the benefits of AI, the Justice Department is on high alert to its risks, including global threats to our national security,” said Deputy Attorney General Lisa Monaco. “As alleged in today’s charges, the defendant stole from Google over 500 confidential files containing AI trade secrets, while covertly working for China-based companies seeking an edge in the AI technology race. The Justice Department will relentlessly pursue and hold accountable those who would siphon disruptive technologies – especially AI – for unlawful export.”

“Today’s charges are the latest illustration of the lengths affiliates of companies based in the People’s Republic of China are willing to go to steal American innovation,” said FBI Director Christopher Wray. “The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences. The FBI will continue its efforts to vigorously pursue those responsible for stealing U.S. companies’ intellectual property and most closely guarded secrets.”  

“Mr. Ding allegedly schemed to siphon off cutting-edge AI technology from Google while secretly trying to go into business with Chinese competitors,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Through the Disruptive Technology Strike Force, we will work relentlessly to find and hold accountable those who would steal advanced American technology and jeopardize our national security and economic prosperity.”

“While Linwei Ding was employed as a software engineer at Google, he was secretly working to enrich himself and two companies based in the People’s Republic of China,” said U.S. Attorney Ismail Ramsey. “By stealing Google’s trade secrets about its artificial intelligence supercomputing systems, Ding gave himself and the companies that he affiliated with in the PRC an unfair competitive advantage.  This office is committed to protecting the innovation of our Silicon Valley companies. To that end, we will aggressively investigate and prosecute the theft of sensitive trade secrets by insiders like Ding, including criminal efforts to jump start illegitimate competition.”

“In the one year since its inception, the Disruptive Technology Strike Force has been relentless in protecting advanced U.S. technologies, like artificial intelligence, from malign actors,” said Assistant Secretary Matthew S. Axelrod of the Commerce Department’s Office for Export Enforcement. “Let today’s announcement serve as further warning – those who would steal sensitive U.S. technology risk finding themselves on the wrong end of a criminal indictment.”

According to court documents, the technology Ding allegedly stole involves the building blocks of Google’s advanced supercomputing data centers, which are designed to support machine learning workloads used to train and host large AI models. According to the indictment, large AI models are AI applications capable of understanding nuanced language and generating intelligent responses to prompts, tasks, or queries. The indictment describes how Google developed both proprietary hardware and software to facilitate the machine learning process powered by its supercomputing data centers. With respect to hardware, Google uses advanced computer chips with the extraordinary processing power required to facilitate machine learning and run AI applications. With respect to software, Google deploys several layers of software, referred to in the indictment as the “software platform,” to orchestrate machine learning workloads efficiently. For example, one component of the software platform is the Cluster Management System (CMS), which functions as the “brain” of Google’s supercomputing data centers. The CMS organizes, prioritizes, and assigns tasks to the hardware infrastructure, allowing the advanced chips to function efficiently when executing machine learning workloads or hosting AI applications.

According to the indictment, Google hired Ding as a software engineer in 2019. Ding’s responsibilities included developing the software deployed in Google’s supercomputing data centers. In connection with his employment, Ding was granted access to Goggle’s confidential information related to the hardware infrastructure, the software platform, and the AI models and applications they supported. The indictment alleges that on May 21, 2022, Ding began secretly uploading trade secrets that were stored in Google’s network by copying the information into a personal Google Cloud account. According to the indictment, Ding continued periodic uploads until May 2, 2023, by which time Ding allegedly uploaded more than 500 unique files containing confidential information.

In addition, the indictment alleges that Ding secretly affiliated himself with two PRC-based technology companies. According to the indictment, on or about June 13, 2022, Ding received several emails from the CEO of an early-stage technology company based in the PRC indicating Ding had been offered the position of Chief Technology Officer for the company. Ding allegedly traveled to the PRC on Oct. 29, 2022, and remained there until March 25, 2023, during which time he participated in investor meetings to raise capital for the new company. The indictment alleges potential investors were told Ding was the new company’s Chief Technology Officer and that Ding owned 20% of the company’s stock.

According to the indictment, unbeknownst to Google, by no later than May 30, 2023, Ding had founded his own technology company in the AI and machine learning industry and was acting as the company’s CEO. Ding’s company touted the development of a software platform designed to accelerate machine learning workloads, including training large AI models. As alleged in the indictment, Ding applied to a PRC-based startup incubation program and traveled to Beijing, to present his company at an investor conference on Nov. 24, 2023. As set forth in the indictment, a document related to Ding’s startup company stated, “we have experience with Google's ten-thousand-card computational power platform; we just need to replicate and upgrade it - and then further develop a computational power platform suited to China's national conditions.” 

The indictment alleges Ding’s conduct violated his employment agreement as well as a separate code of conduct that Ding signed when he became a Google employee. Further, the indictment describes measures that Ding allegedly took to conceal his theft of the trade secrets. For example, he allegedly copied data from Google source files into the Apple Notes application on his Google-issued MacBook laptop. By then converting the Apple Notes into PDF files and uploading them from the Google network into as separate account, Ding allegedly evaded detection by Google’s data loss prevention systems. Likewise, the indictment describes how in December 2023 Ding allegedly permitted another Google employee to use his Google-issued access badge to scan into the entrance of a Google building – making it appear he was working from his U.S. Google office when, in fact, he was in the PRC.

Ding is charged with four counts of theft of trade secrets. If convicted, Ding faces a maximum penalty of 10 years in prison and up to a $250,000 fine for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI and Commerce Department are investigating the case.

The U.S. Attorney’s Office for the Northern District of California and Justice Department National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Today’s action was coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation-states.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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Chinese national arrested and charged with stealing ai trade secrets from google.

Ryan Lucas in 2018

A former Google engineer was charged with stealing AI technology while secretly working with two China-based companies. Carl Court/Getty Images hide caption

A former Google engineer was charged with stealing AI technology while secretly working with two China-based companies.

A Chinese national who allegedly stole more than 500 files from Google with confidential information on the company's AI technology has been arrested and charged with stealing trade secrets, according to the Justice Department.

The defendant, former Google employee Linwei Ding, was arrested Wednesday morning in Newark, Calif. The 38-year-old faces four counts of theft of trade secrets. Prosecutors say at the same time that Ding was working for Google and stealing the building blocks of its AI technology, he was also secretly employed by two China-based tech companies.

"The Justice Department will not tolerate the theft of artificial intelligence and other advanced technologies that could put our national security at risk," Attorney General Merrick Garland said in a statement. "We will fiercely protect sensitive technologies developed in America from falling into the hands of those who should not have them."

The case is latest example of what American officials say is a relentless campaign by China to try to steal U.S. trade secrets, technology and intellectual property. Officials say China aims to use those stolen secrets to supplant the U.S. as the world's leading power.

"Today's charges are the latest illustration of the lengths affiliates of companies based in the People's Republic of China are willing to go to steal American innovation," said FBI Director Christopher Wray. "The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences."

The U.S. is the global leader in AI, an emerging technology that could reshape many facets of modern life.

AI also could become an indispensable tool to help law enforcement protect public safety. But Justice Department officials also have warned of the potential dangers that AI poses to national security if it falls into the hands of criminals or hostile nation states.

The department has also formed a unit to protect advanced American technology such as AI from being pilfered by foreign adversaries.

In Ding's case, the indictment says the trade secrets he allegedly stole are related to "the hardware infrastructure and software platform that allow Google's supercomputing data centers to train large AI models through machine learning."

Google spokesperson Jose Castaneda said the company has "strict safeguards to prevent theft of our confidential commercial information and trade secrets."

"After an investigation, we found that this employee stole numerous documents, and we quickly referred the case to law enforcement," Castaneda said. "We are grateful to the FBI for helping protect our information and will continue cooperating with them closely."

The indictment says Ding was hired at Google as a software engineer in 2019. His work focused on the development of software related to machine learning and AI applications, according to prosecutors.

In May of 2022, Ding allegedly began uploading confidential information—more than 500 unique files in all—from Google's network into a personal Google Cloud account.

Prosecutors say Ding tried to hide what he was doing by copying the stolen files first into the Apple Notes application on his laptop, converting them into PDF files and uploading those into his personal Cloud account.

Less than a month later, court papers say, Ding received emails from the head of a Chinese technology company, Beijing Rongshu Lianzhi Technology, with an offer to be the company's chief technology officer.

Ding allegedly traveled to China to help raise money for the company, which worked on AI, and was announced as the company's CTO. A year later, Ding also allegedly founded his own technology company, Zhisuan, that also focused on AI and machine learning.

Prosecutors say Ding never informed Google of his ties to either Chinese company, and continued to be employed by Google.

Then in December 2023, court papers say, Google detected Ding trying to upload more files from the company's network to his personal account while he was in China. Ding allegedly told the company's investigator that he'd uploaded the files as evidence of his work for Google.

A week after being interviewed by the investigator, Ding allegedly booked a one-way ticket to Beijing. He then sent his resignation letter to Google. Shortly after that, the company learned of Ding's role with Zhisuan. Google then suspended his access to the company's networks.

Shortly after that, the FBI began its investigation.

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A former software engineer at Google has been charged with stealing artificial intelligence trade secrets from the company while secretly working with two companies based in China, the Justice Department said Wednesday.

Linwei Ding, a Chinese national, was arrested in Newark, Calif., on four counts of federal trade secret theft, each punishable by up to 10 years in prison.

The case against Ding, 38, was announced at an American Bar Assn. conference in San Francisco by Atty. Gen. Merrick Garland, who along with other law enforcement leaders has repeatedly warned about the threat of Chinese economic espionage and about the national security concerns posed by advancements in artificial intelligence and other developing technologies.

“Today’s charges are the latest illustration of the lengths affiliates of companies based in the People’s Republic of China are willing to go to steal American innovation,” FBI Director Christopher Wray said in a statement. “The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences.”

Google said it had determined that the employee had stolen “numerous documents” and referred the matter to law enforcement.

“We have strict safeguards to prevent the theft of our confidential commercial information and trade secrets,” Google spokesman Jose Castaneda said in a statement. “After an investigation, we found that this employee stole numerous documents, and we quickly referred the case to law enforcement. We are grateful to the FBI for helping protect our information and will continue cooperating with them closely.”

A lawyer listed as Ding’s defense attorney had no comment Wednesday evening.

Artificial intelligence is the main battleground for high tech competitors, and the question of who dominates can have major commercial and security implications. Justice Department leaders in recent weeks have been sounding alarms about how foreign adversaries could harness AI technologies to negatively affect the United States.

Deputy Atty. Gen. Lisa Monaco said in a speech last month that the administration’s multi-agency Disruptive Technology Strike Force would place AI at the top of its enforcement priority list, and Wray told a conference last week that AI and other emerging technologies had made it easier for adversaries to try to interfere with the American political process.

Garland echoed those concerns at the San Francisco event, saying Wednesday, “As with all evolving technologies, [AI] has pluses and minuses, advantages and disadvantages, great promise and the risk of great harm.”

The indictment unsealed Wednesday in the Northern District of California alleges that Ding, who was hired by Google in 2019 and had access to confidential information about the company’s supercomputing data centers, began uploading hundreds of files into a personal Google Cloud account two years ago.

Within weeks of the theft starting, prosecutors say, Ding was offered the position of chief technology officer at an early-stage technology company in China that touted its use of AI technology and that offered him a monthly salary of about $14,800, plus an annual bonus and company stock. The indictment says Ding traveled to China and participated in investor meetings at the company and sought to raise capital for it.

He also separately founded and served as chief executive of a China-based startup that aspired to train “large AI models powered by supercomputing chips,” the indictment said.

Prosecutors say Ding did not disclose either affiliation to Google, which described him Wednesday as a junior employee.

He resigned from Google last Dec. 26.

Three days later, Google officials learned that he had presented as CEO of one of the Chinese companies at an investor conference in Beijing. Officials also reviewed surveillance footage showing that another employee had scanned Ding’s access badge at the Google building in the U.S. where he worked to make it look like Ding was there during times when he was actually in China, the indictment says.

Google suspended Ding’s network access and locked his laptop, and discovered his unauthorized uploads while searching his network activity history.

The FBI in January served a search warrant at Ding’s home and seized his electronic devices, and later executed an additional warrant for the contents of his personal accounts containing more than 500 unique files of confidential information that authorities say he stole from Google.

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Ex-Google Engineer Charged With Stealing A.I. Secrets for Chinese Firm

Linwei Ding, a Chinese national, was arrested in California and accused of uploading hundreds of files to the cloud.

Yellow grass and green trees near the glass facade of Google’s headquarters in California. The company logo appears in large blue, red, yellow and green letters, appears on the exterior of the building.

By Glenn Thrush and Nico Grant

Glenn Thrush reported from Washington, and Nico Grant from San Francisco.

A Chinese citizen who recently quit his job as a software engineer for Google in California has been charged with trying to transfer artificial intelligence technology to a Beijing-based company that paid him secretly, according to a federal indictment unsealed on Wednesday.

Prosecutors accused Linwei Ding, who was part of the team that designs and maintains Google’s vast A.I. supercomputer data system, of stealing information about the “architecture and functionality” of the system, and of pilfering software used to “orchestrate” supercomputers “at the cutting edge of machine learning and A.I. technology.”

From May 2022 to May 2023, Mr. Ding, also known as Leon, uploaded 500 files, many containing trade secrets, from his Google-issued laptop to the cloud by using a multistep scheme that allowed him to “evade immediate detection,” according to the U.S. attorney’s office for the Northern District of California.

Mr. Ding was arrested on Wednesday morning at his home in Newark, Calif., not far from Google’s sprawling main campus in Mountain View, officials said.

Starting in June 2022, Mr. Ding was paid $14,800 per month — plus a bonus and company stock — by a China-based technology company, without telling his supervisors at Google, according to the indictment. He is also accused of working with another company in China.

Mr. Ding openly sought funding for a new A.I. start-up company he had incorporated at an investor conference in Beijing in November, boasting that “we have experience with Google’s 10,000-card computational power platform; we just need to replicate and upgrade it,” prosecutors said in the indictment, which was unsealed in San Francisco federal court.

“The Justice Department will not tolerate the theft of artificial intelligence and other advanced technologies that could put our national security at risk,” said Attorney General Merrick B. Garland, who announced the indictment during an appearance at an American Bar Association conference in San Francisco on Wednesday afternoon.

The charges underscore the high-stakes contest for primacy in artificial intelligence. While American companies have developed most advances in generative A.I., China has made it a strategic priority to lead the growing field.

Tech industry insiders have estimated that China is at least a year behind the United States , but many Chinese start-ups have tapped American technology to try to keep up, especially Meta’s open-source large language model, called Llama. Generative A.I., which is behind ChatGPT and the wave of conversational chatbots, has quickly become one of the world’s most coveted technologies.

In seconds, these types of tools can generate convincing text and images that could be used to boost productivity, create misinformation or provide amusement. Audio and video capabilities are not far behind. Google developed some of the foundational breakthroughs that make these systems work. The company has said that its latest group of A.I. models, named Gemini, are among the most powerful available today.

But since ChatGPT’s debut, Google has lost its status as a market leader and its stumbles have attracted attention. The company has been widely criticized for racial biases in its image generator , leading it to pause users’ ability to create images of people.

Accusations of intellectual property theft have been a major sticking point in U.S.-China relations for years. A Chinese national was arrested in 2015 for selling some of IBM’s source code to parties in China. In 2018, a former Apple employee was apprehended as he tried to board a flight to Beijing with the company’s autonomous-driving trade secrets .

The same year, the Chinese firm Sinovel Wind Group was convicted of stealing wind turbine technology from a Massachusetts-based company, AMSC, which incurred more than $800 million in losses.

In October, Christopher A. Wray, the F.B.I. director, said that intellectual property theft from China was a danger to U.S. economic and national security, describing it as the “defining threat of this generation.”

José Castañeda, a Google spokesman, said in a statement: “We have strict safeguards to prevent the theft of our confidential commercial information and trade secrets. After an investigation, we found that this employee stole numerous documents, and we quickly referred the case to law enforcement. We are grateful to the F.B.I. for helping protect our information and will continue cooperating with them closely.”

The indictment suggested that Mr. Ding had some help, saying that another Google employee swiped Mr. Ding’s identification card at a company office to help him conceal a trip to China.

Google, referring to Mr. Ding as a “junior employee,” initially said he had acted alone but later said that did not appear to be the case. It maintained that its security systems had worked as intended.

It was not immediately clear whether Mr. Ding has legal representation.

The government offered few details about the life of Mr. Ding, who began working for Google in early 2019 and quit suddenly in January — after booking a one-way ticket to Beijing.

Mr. Ding listed a degree from the Dalian Institute of Technology in China in 2010, along with degrees from the University of Southern California and Stanford, on a LinkedIn page that corresponded to his name and the details of employment at Google.

The page lists stints at software semiconductor and health care companies over the past decade, along with awards he said he earned at Google, including the “Perfy Award and Feats of Engineering.”

Kitty Bennett contributed reporting.

Glenn Thrush covers the Department of Justice. He joined The Times in 2017 after working for Politico, Newsday, Bloomberg News, The New York Daily News, The Birmingham Post-Herald and City Limits. More about Glenn Thrush

Nico Grant is a technology reporter covering Google from San Francisco. Previously, he spent five years at Bloomberg News, where he focused on Google and cloud computing. More about Nico Grant

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Ex-Google engineer charged with stealing AI trade secrets while working with Chinese companies

FILE - Items are displayed in the Google Store at the Google Visitor Experience in Mountain View, Calif., Oct. 11, 2023. The Justice Department says a former software engineer at Google has been charged with stealing artificial intelligence technology from the company while secretly working with two companies based in China. Linwei Ding was arrested in Newark, California., on four counts of federal trade secret theft.(AP Photo/Eric Risberg, File)

FILE - Items are displayed in the Google Store at the Google Visitor Experience in Mountain View, Calif., Oct. 11, 2023. The Justice Department says a former software engineer at Google has been charged with stealing artificial intelligence technology from the company while secretly working with two companies based in China. Linwei Ding was arrested in Newark, California., on four counts of federal trade secret theft.(AP Photo/Eric Risberg, File)

google china censorship case study

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WASHINGTON (AP) — A former software engineer at Google has been charged with stealing artificial intelligence trade secrets from the company while secretly working with two companies based in China, the Justice Department said Wednesday.

Linwei Ding, a Chinese national, was arrested in Newark, California, on four counts of federal trade secret theft, each punishable by up to 10 years in prison.

The case against Ding, 38, was announced at an American Bar Association conference in San Francisco by Attorney General Merrick Garland, who along with other law enforcement leaders has repeatedly warned about the threat of Chinese economic espionage and about the national security concerns posed by advancements in artificial intelligence and other developing technologies.

“Today’s charges are the latest illustration of the lengths affiliates of companies based in the People’s Republic of China are willing to go to steal American innovation,” FBI Director Christopher Wray said in a statement. “The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences.”

Doctors from the Alabama Fertility Clinic takes photos of the votes as the debate over SB159 bill (IVF Fertility Bill) in the House Chambers is voted on, Wednesday, March 6, 2024, in Montgomery, Ala. (AP Photo/ Butch Dill)

Google said it had determined that the employee had stolen “numerous documents” and referred the matter to law enforcement.

“We have strict safeguards to prevent the theft of our confidential commercial information and trade secrets,” Google spokesman Jose Castaneda said in a statement. “After an investigation, we found that this employee stole numerous documents, and we quickly referred the case to law enforcement. We are grateful to the FBI for helping protect our information and will continue cooperating with them closely.”

A lawyer listed as Ding’s defense attorney had no comment Wednesday evening.

Artificial intelligence is the main battleground for competitors in the field of high technology, and the question of who dominates can have major commercial and security implications. Justice Department leaders in recent weeks have been sounding alarms about how foreign adversaries could harness AI technologies to negatively affect the United States.

Deputy Attorney General Lisa Monaco said in a speech last month that the administration’s multi-agency Disruptive Technology Strike Force would place AI at the top of its enforcement priority list, and Wray told a conference last week that AI and other emerging technologies had made it easier for adversaries to try to interfere with the American political process.

Garland echoed those concerns at the San Francisco event, saying Wednesday that, “As with all evolving technologies, (AI) has pluses and minuses, advantages and disadvantages, great promise and the risk of great harm.”

The indictment unsealed Wednesday in the Northern District of California alleges that Ding, who was hired by Google in 2019 and had access to confidential information about the company’s supercomputing data centers, began uploading hundreds of files into a personal Google Cloud account two years ago.

Within weeks of the theft starting, prosecutors say, Ding was offered the position of chief technology officer at an early-stage technology company in China that touted its use of AI technology and that offered him a monthly salary of about $14,800, plus an annual bonus and company stock. The indictment says Ding traveled to China and participated in investor meetings at the company and sought to raise capital for it.

He also separately founded and served as chief executive of a China-based startup company that aspired to train “large AI models powered by supercomputing chips,” the indictment said.

Prosecutors say Ding did not disclose either affiliation to Google, which described him Wednesday as a junior employee.

He resigned from Google last Dec. 26.

Three days later, Google officials learned that he had presented as CEO of one of the Chinese companies at an investor conference in Beijing. Officials also reviewed surveillance footage showing that another employee had scanned Ding’s access badge at the Google building in the U.S. where he worked to make it look like Ding was there during times when he was actually in China, the indictment says.

Google suspended Ding’s network access and locked his laptop, and discovered his unauthorized uploads while searching his network activity history.

The FBI in January served a search warrant at Ding’s home and seized his electronic devices, and later executed an additional warrant for the contents of his personal accounts containing more than 500 unique files of confidential information that authorities say he stole from Google.

ERIC TUCKER

IMAGES

  1. New Approach to China: Google and Censorship in the Chinese Market Case

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  2. Google China Censorship Issue Case Study

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  3. Google China Censorship Issue Case Study

    google china censorship case study

  4. Google China Censorship Issue Case Study

    google china censorship case study

  5. New Approach to China: Google and Censorship in the Chinese Market Case

    google china censorship case study

  6. Google China Censorship Case Study

    google china censorship case study

COMMENTS

  1. How Google took on China—and lost

    Google China's search engine was launched in 2006 and abruptly pulled from mainland China in 2010 amid a major hack of the company and disputes over censorship of search results.

  2. Google in China

    2006 | Case No. P54. Political Economy. Using servers located in the United States, Google began offering a Chinese-language version of Google.com in 2000. The site, however, was frequently unavailable or slow because of censoring by the Chinese government. After extensive debate within the company, Google decided to offer a modified version of ...

  3. Why Google Quit China—and Why It's Heading Back

    Google had set up shop in China four years before the breach, offering a version of its services that conformed to the government's oppressive censorship policies. At the time, Google officials ...

  4. Google's censored Chinese search engine: a catalogue of ethical violations?

    This project, named Dragonfly, will encompass a new, heavily censored version of Google's search services, including mobile apps, that will be run in partnership with a local company in China.

  5. PDF Searching for Internet Freedom in China: a Case Study on Google S China

    principles on which Google's business has been built, the company eventually terminated its physical search-engine operations in China in 2010 after several rounds of negotiations with the Chinese government. Using Google.cn as a case study, this Article illustrates China's method of regulating the Internet, which may become a dominant

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    Google and China from both theoretical and practical perspectives. Starting with an overview of the internet censorship regime in China, the article goes on to assess the legal merits of a WTO challenge in this case. First, the article discusses which service sector or subsectors might be at issue. Second, the article analyzes whether

  7. Google's China Problem (and China's Google Problem)

    Clive Thompson article on Google's operations in China, google.cn, and self-censorship to which it subjects company, which has been accused of collaboration with Communist Party merely to secure ...

  8. A New Approach to China: Google and Censorship in the Chinese Market

    The first across-the-table negotiation between Google and China concluded successfully in 2006, when Google received a license to establish a local domain (google.cn) targeted at Chinese Internet users and not subject to the "Great Firewall.". During these negotiations both Google and the Chinese government struggled to reach an outcome ...

  9. Looking Behind Google's Stand in China

    Professor John A. Quelch looks behind the headlines in a new case. Key concepts include: China has become more emboldened and self-confident as a result of its increasing economic significance. Google acted precipitously without giving due consideration to the impact of its announcement on stakeholders. The Google issue has become a cause ...

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    Design/methodology/approach - The paper takes the form of a case study. Findings - To do business in the Chinese market, Google had to comply with Chinese Government censorship restrictions.

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    With the failure of complying with institutions, Google exited the Chinese market in 2010. To re-enter this potential biggest market, Google launched the Dragonfly project in 2018, a search engine that is compatible with the Chinese government's censorship. The purpose of the study is to initiate strategies in terms of marketing, institutions ...

  12. Google's Problems in China

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  13. Google's China Problem: A Case Study on Trade, Technology and Human

    Starting with an overview of the internet censorship regime in China, the article goes on to assess the legal merits of a WTO challenge in this case. ... Gao, Henry S., Google's China Problem: A Case Study on Trade, Technology and Human Rights Under the GATS (December 24, 2011). Asian Journal of WTO & International Health Law and Policy (AJWH

  14. Google and the Government of China: A Case Study in Cross-Cultural

    Note: Google slightly revised its 2003 figures in its 2005 10-K filing.Moreover, it supplied additional data beginning in 2006 as to how much of its international revenue was earned in the United Kingdom. In 2003 earnings in the United Kingdom accounted for 10 percent of revenue, and rose to 13 and 14 percent in 2004 and 2005, respectively.

  15. A Clash of values: a case study of Google's experience in China (2006-2010)

    — A Case Study of Google's Experience in China (2006-2010) By . Warren Lee . A Thesis Submitted to the Department of Public Policy and Administration . ... violate Chinese censorship laws, Google knew that it ran the risk of closing shop and terminating its business in China all together.

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    Abstract. Based on the negotiation between Google and the Chinese government to allow access by Chinese citizens to a high-speed Chinese version of the Google search engine. In order to reach agreement with the Chinese government, Google had to agree to allow the government to censor access to some sites turned up by Google's search engine.

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    Google has said it will end the controversial censorship of its search service in China and risk expulsion from the most populous internet market, following what it claimed were Chinese-based ...

  18. Internet Censorship in China: Looking Through the Lens of

    As a preliminary search using the terms "censorship," "Internet censorship," and "Internet censorship + China" in Google Ngram Viewer ... (2014) Batman, pandaman and the blind man: a case study in social change memes and internet censorship in China. Journal of Visual Culture 13(3): 359-375. Crossref. Google Scholar. Müller Beate ...

  19. Google in China: government censorship and corporate reputation

    Findings. To do business in the Chinese market, Google had to comply with Chinese Government censorship restrictions. The company's decision to do so was announced in the wake of Google's very recent refusal to provide user information to the US Government case against child pornography. Wall Street's response confirmed the profit potential of ...

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