Congressional Testimony (Oral Version): “The Internet in China: A Tool for Freedom or Suppression?”

House of Representatives Committee on International Relations
Joint Hearing of the Subcommittee on Africa, Global Human Rights & International Operations and the Subcommittee on Asia and the Pacific
“The Internet in China: A Tool for Freedom or Suppression?”
Testimony of Jack Krumholtz, Associate General Counsel and Managing Director, Federal Government Affairs, Microsoft Corporation
February 15, 2006

Oral Testimony

Chairman Smith, Ranking Member Payne, Chairman Leach, Ranking Member Faleomavaega and members of the subcommittees, Microsoft welcomes the opportunity to address the issues around Internet-based services in China. We are deeply concerned about recent events that have prompted widespread public concern over matters of individual security and government control of Internet content in that country. And we are actively seeking ways of reducing the risks to individual users while maximizing the availability of information and opinion through these services. My written testimony elaborates on the challenges companies like Microsoft face providing Internet services in countries whose laws and free speech protections don’t mirror our own. In the interest of time, I would like focus my remarks today on Three Main Points.

FIRST: Internet services like Microsoft’s MSN Spaces—which hosts personal websites, or “blogs”–are having a major, positive impact in China, despite the effort by various agencies of the Chinese government to control certain kinds of political content. In just the past few years, we have seen repeated examples in China of official responses to domestic developments that have been shaped for the better because of information provided and opinions expressed over the Internet. Most prominent have been reports about the government’s handling of health issues, such as SARS and Avian flu, many of them circulated by personal web sites. While there are competing blog services offered by some Chinese companies, Microsoft’s service, which was launched less than nine months ago, is now the largest—with more than three and a half million users. The overwhelming majority of Internet-based communications and search are not politically oriented, but a survey of Chinese Internet users found that “48% percent…believe that by going online the Chinese will learn more about politics, and 60%…believe the Internet will provide more opportunities for criticizing the government.” Mr. Chairman, this is the powerful reality of the Internet in China. The Internet has already transformed the economic, cultural and political landscape of China. It is vital that companies — particularly American companies — with the widest array of communications and information services continue to offer services there.

SECOND: Microsoft is committed to working with governments, industry, and other stakeholders to protect the best interests of our customers, but enacting legislation that effectively forces us to withdraw from China would be counter-productive. We recognize from conversations with Members and staff of these Subcommittees that you have strong concerns that American companies embrace Chinese censorship of the Internet. Let me assure you that this is not the case. Microsoft is deeply troubled by the restrictive regulations we operate under in China, and we comply with them only to the extent required by law.

However, to suggest that we can resist or defy these regulations assumes a much different reality than the one we deal with in China on a regular basis. While we are actively exploring how best to protect the interests of our users under these circumstances, we do not have the influence or leverage to pressure the Chinese into changing their regulations or refraining from enforcing them. At the same time, we are not suggesting that compliance with local law is a matter of deferring reflexively to local authorities or endorsing any specific policy or ideology. The simple fact is that there is not a government in the world, including the United States, which would accept the proposition that companies can set their own terms of operation in defiance of local law. Moreover, there are Chinese competitors for our services — competitors who would like nothing better than to see us forced to stop offering them in China. We must ask ourselves — will Chinese citizens be better off without access to our services?

THIRD: The issues we face are global in scope, and it is essential that the U.S. Government play an active role in building a consensus for the widest possible availability of information over the Internet. The Internet raises issues of legitimate governmental concern, including matters of privacy, child safety, and national security. But authorities around the world have made different judgments about the standards appropriate to their cultures and national circumstances. The Chinese effort to manage content on the Internet is the most troubling of these fundamental differences. It is therefore the responsibility of governments, with the active leadership of the United States, to seek to reduce or reconcile these differences in order to protect the value and power of the Internet on a global basis. Here again, companies like Microsoft can play an active role in supporting efforts to promote a deeper consensus across many nations. We therefore welcome yesterday’s announcement by Secretary of State Condoleezza Rice establishing the Global Internet Freedom Task Force and look forward to working with that group.

What Microsoft will continue to do is what we do best— provide the technologies and services that enable individuals and organizations to harness the power of the Internet for their own purposes. We think that the trend of history will continue to come down on the side of openness and transparency—as it has increasingly been doing in China, and as it will ultimately do everywhere else.

Thank you again for the opportunity to discuss these issues with the Subcommittees and we look forward to working with you on this important issue.