Yahoo settles lawsuit with jailed Chinese journalists

UPDATE: 11:30 a.m. PT Adds background on proposed Smith law prohibiting U.S. companies from cooperating with governments to censor the Internet.

Yahoo listened.

A week after being excoriated by lawmakers over supplying information to the Chinese government that landed two journalists in jail, Yahoo has settled the lawsuit filed by the journalists.

Shi Tao and Wang Xiaoning, both serving 10-year prison sentences, sued Yahoo in April alleging that Yahoo Hong Kong willingly provided their e-mails, IP addresses, and physical addresses to the Chinese government. The men were arrested for allegedly leaking state secrets, code language that should have tipped Yahoo off to the fact that the government was attempting to repress free speech for political reasons, said Morton Sklar, executive director of the World Organization for Human Rights USA, which filed the lawsuit on behalf of the men.

Yahoo had denied responsibility, saying it was merely complying with Chinese law, and had asked the federal court in San Francisco to dismiss the lawsuit.

The jailed men and their families are happy with the settlement, Sklar said. A lawsuit could have taken as long as five years to conclude, he added. Terms of the settlement are sealed by the court.

"The settlement provides more immediate help for the detainees and their families, but also provides a precedent making clear that U.S. companies have to do much more than just follow the orders of their host governments; that they have to look to U.S. laws and U.S. human rights standards when they make their decisions abroad," Sklar said.

In addition to providing financial support to the families, Yahoo will provide a humanitarian relief fund to support other political dissidents and their families, the company said in a statement.

"After meeting with the families, it was clear to me what we had to do to make this right for them, for Yahoo, and for the future," Chief Executive Jerry Yang said in the statement. "Yahoo was founded on the idea that the free exchange of information can fundamentally change how people lead their lives, conduct their business, and interact with their governments. We are committed to making sure our actions match our values around the world."

In a hearing before the U.S. House of Representatives Foreign Affairs Committee last Tuesday, Rep. Chris Smith (R-N.J.), urged Yang and Yahoo General Counsel Michael Callahan to settle the lawsuit.

"Settle it, and I would say settle it generously in their favor," Smith said. "That would be one way you could convey to the committee, to shareholders, and especially (to) the victims that you recognize there are true victims because of this complicity."

Smith sponsored the Global Online Freedom Act of 2007, which would prohibit U.S. Internet companies from cooperating with repressive regimes on censoring the Internet and using Internet user account data to track down and punish pro-democracy activists.

Sklar speculated that Yahoo decided to settle the case because of the hearing, at which the Yahoo executives were called moral "pygmies" by a lawmaker, and because Yahoo would have been forced to disclose in court information about its involvement in other Chinese investigations.

"It's clear they could not tolerate any longer being on the wrong side of this case," he said. "It was causing too much embarrassment and too much public exposure."

There are more than 200 documented cases of Internet users being jailed in China as a result of disclosures of their user ID information, many of them Yahoo users, according to Sklar.

Sklar hopes those cases will be addressed by Congress, which has asked Yahoo to provide information on other Chinese investigations in which the company has cooperated.

Congress has held several hearings on the matter of tech companies cooperating with China, including one in February 2006 at which Callahan said Yahoo didn't know the nature of the investigation when it gave information to Chinese authorities.

Callahan said last week that he learned approximately six months later what the details of the investigation were and apologized for not providing that updated information to Congress.

The settlement was first reported by The Associated Press.

[Pascoli]

AT&T you're next

I guess the US Congress will have some balls to go after ATT next, for divulging american citizens information to the US government, and breaking US law in doing so. Instead, they're discussing whether to give them immunity for their unlawful behavior.
Their punishing yahoo for obeying chineese law, with yahoo doing business in China. Should China now start punishing Companies violating their law here in the USA, even if what those companies do here in the states is perfectly legal?

[Ushiikun]

What's next?

There is now a a precedence that shows that U.S. law takes precedence over foreign law, even in the foreign country. I think I'm going to sue some companies, on behalf of their workers, for not paying their employees the U.S. minimum wage.

[volterwd]

So um...

did they actually leak the secrets? This seems to be glossed over... it's nice to pretend as if they are righeous freedom fighters but not all people are.

[paulej]

Did Yahoo Have a Choice?

If Yahoo refused to comply, then perhaps they would have been refused to conduct business in China. That could very well kill their business.

I can appreciate the seriousness of this issue, but when you're in a foreign country conducting business, you are obligated to follow the laws and demands of that country. So, I cannot blame Yahoo for doing anything wrong, really.

And what of the US? There were on-line gambling sites operating over the Internet and *outside* the borders of the US-- publicly traded companies in the UK! -- and the US arrested their executives! Why? Individual states in the US feel like you are obligated to follow the laws of their states, even if you are far, far away...

We are living in some strange times.

[mikeburek]

I wish

I wish the same law makers who are so worried about the Chinese privacy issues would also defend American privacy. Remember when the big search engines were asked for their search data? Where were the law makers fighting for the American people then? What about all the back doors the gov't wanted for VOIP, or the information the gov't asks ISP for? It sure isn't the lawmakers fighting for American privacy. It's the American people who have to defend the Constitution and Bill of Rights since it seems we are just food for the American law makers.

I will have to let my vote speak, and get others to do the same.

[Stating]

Crybabies

China is a Communist totalitarian imperialistic state. Get over it. If Congress does not like China's SOP then they should immediately prevent all U.S. companies from doing business with China. And Congress should stop accepting political donations -- hard AND soft money, from China, and Chinese foreign agents. Yeah, like that will ever happen.

[inachu]

Lockdown in China is sometimes good.

I met a newly minted so called chinese christian the other day and asked her how do you know you are saved? She repliad that she could feel it.
She then expanded saying that it felt like a tingle in her right arm.

Comming from a atheist country to being drowned into religion when you arrive in USA having people banging on your door asking if you are saved when the basic idea of being saved is so vastly misunderstood then yes having religious lockdown is a safe thing. Speaking out against crackdowns in general may seem like a good thing but when you meet people such as I have then crackdowns are not all that bad to protect their citizens from cults and so forth.

Chinese branded religion is also a bad thing and so is handing information over sending an innocent to jail perhaps forever.