Google threatens to quit China
Updated
Internet giant Google is threatening to shut down its operations in China saying its uncovered a sophisticated cyber attack on the company and human rights activists. The US company claims the mid-December attack involved the theft of intellectual property from Google and that at least 20 other large companies were targetted. The US Secretary of State has called for an explanation from China, but Beijing is yet to comment - although an anonymous senior information officer told Xinhua news agency that they are looking into the case.
Presenter: Karon Snowdon
Speakers: Dr Jason Wilson, lecturer in digital communications, University of Wollongong; Alok Aggarwal, chairman, Evalueserve
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SNOWDON: By going public Google is signalling it's at the end of its tether with China. In an unprecedented move the reasons were outlined by company spokesman Peter Barron.
BARRON: We discovered in the middle of December that Google had been the target of a cyber attack and it seemed that that attack was aimed at accessing the gmail accounts of activists involved in human rights in China. Now we don't think that they were successful in that, but in investigating that we discovered that actually it was much bigger than we first thought. We discovered that they were also using similar targeting techniques on 20 big companies around the world, and also using phishing scams and malware that they were accessing the gmail accounts of activists who were interested in human rights in China. We decided to change our approach to China. These attacks on our system as well as the surveillance exercise that we've discovered has led us to believe that we should no longer agree to censor our results in China. So we're taking that new approach and we're going to do a review of our business operations in China.
SNOWDON: Google says it's contacted the relevant US authorities and is considering pulling out of China. Human rights groups who have previously criticised Google for agreeing to Beijing's censorship rules for four years have praised its stand today. But Dr Jason Wilson a Lecturer in Digital Communications at the University of Wollongong says Google's motivation while it might include human rights goes further.
WILSON: I don't know if you've been monitoring the social networks and the tech websites, but already they're getting an enormous amount of goodwill Google out of this announcement. And they've got some tricky kind of PR battles looming over the next little while in terms of News Corporation and various other players. So there's a huge discussion to be had there and this makes Google look kind of good and it makes it look like they're leading up to that missions of theirs, which is don't be evil.
SNOWDON: Google also might not have that much to lose by leaving a difficult market. The company holds only 31 per cent of the search engine business in China compared to the market leader Baidu, with 64 per cent. It had hoped to challenge for the top spot but earned less than an estimated 300-million US dollars in China last year - a tiny fraction of its total revenue for the 3rd quarter alone of almost 6-Billion dollars. While the industrial espionage charge is serious it provides an exit strategy that puts the company in a favourable light. Jason Wilson.
WILSON: I think it's right to approach this with some scepticism. I think there's probably lots of things going on here. Google has had a long history of conflict with the Chinese state. They seem very upset in the press release about being hacked and having intellectual property stolen, and they seem to be implying pretty strongly that the Chinese state had something to do with that.
SNOWDON: Google's stand will put pressure on other internet providers in China, but they might also see opportunities if Google is forced to leave the market. Alok Aggarwal, chairman of the US based research firm, Evalueserve has 150 staff in China. While reluctant to jump to conclusions he says any business will be worried about the threat of hacking.
AGGARWAL: Let me not mince words here it's definitely something of concern but it is also something where we need to wait, watch and see how this unfolds. So it would behoove us, companies like us to be careful and to look at all options here. The entire thing could unravel fairly easily and which would be frankly neither good for Google nor good for China. And the world is so globalised, so integrated, China needs the world, the world needs China. So I think it will be fairly monumental.
SNOWDON: Google's statement said the other international companies hacked into included those in the finance, technology, media and chemical sectors in Europe and the US.
