Google’s behaviour in China has always been something of a reputation menace for them. Are they colluding in censorship? How can they square their business objective of organising the world’s information with the censorship requirements of China’s state? They might not need to any more after effectively accusing the Chinese government of sponsoring a sophisticated hack of their systems.
One side is the Chinese government who insist that “Internet companies and all sorts of websites must recognise their social responsibilities and further strengthen their internet security. They must voluntarily submit to the supervision and guidance of government departments.” “Must voluntarily submit” is nice totalitarian touch from the government spokesman. On the other side is Google trying to square their “do no evil” with their fraught relationship with China’s government and its censoring approach to internet activities.
Shareholders have already come out in support of Google’s stance, demonstrating that this is likely to be a PR win for the US company. Now Yahoo and Bing will have to consider their own response to the Chinese government. Do they try to exploit the situation commercially at Google’s expense which could be an expensive strategy in the longer reputational terms or do they follow Google’s lead.
For the Chinese government this could not have come at a worse time for their reputation as a place you can do business. As one commentator succinctly put it: “This is a very politically charged environment. Multinationals have been complaining about ‘Buy China’ policies, unfair restrictions and hacking… and this is going to be very damaging if there isn’t a solution. There’s a feeling that China is emboldened and that they don’t need to have the same sort of dialogue. This is the mismatch – people here think no one can do without China, and I think now some companies are thinking no one can deal with China.”
Google has long recognised that government relations is a long term threat to their dominance of their markets. In too many markets they are verging close to monopoly strength. Where the 90s was the decade of Microsoft bashing, it could be the 10s is a decade for Google bashing. Avoiding questionable business practices could be the first part in a more flexible and visible response to working with questionable governments around the world.