Internet companies that quashed Chinese web freedom now seek common code for conducting business abroad

Microsoft, Google, Yahoo and Vodafone Group -- a UK-based mobile phone company -- announced earlier this week that they had been talking with human rights advocates for more than a year in an attempt to agree on a set of rules for conducting business in countries that infringe on their citizens' rights.

The companies said their goal was to agree to a code of conduct by the end of 2007, which would hopefully head off legislation that would forcibly restrict business dealings in countries such as China. Google, Microsoft and Yahoo -- among others -- faced congressional hearings last year after some companies agreed to aid China in blocking access to sites that advocate free speech, including U.S. government sites.

Some companies agreed to turn over internet user data to the Chinese government, which in one case involving Yahoo, eventually helped lead to the arrest of a dissident. To avoid U.S. government interference in business dealings abroad, Yahoo and the other three tech giants are working with leading human rights groups -- including Amnesty International, Human Rights Watch, the Center for Democracy and Technology, and Business for Social Responsibility -- to draw up a code of conduct all four firms can agree to.

According to Steve Lippman, vice president of Trillium Asset Management, companies with business dealings in China "face a real balancing act."

"This isn't clear-cut, like child slave labor, but investors are definitely questioning it," Lippman told The Mercury News. "Companies don't want to write off a market like China, but their bright, idealistic people don't want to be writing code that helps get democratic activists thrown in jail."

Lippman admitted that although there was no guarantee that all the companies would agree to a uniform code of conduct, he was "cautiously optimistic."

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