What a Google China exit would mean

Google appears increasingly close to shuttering operations in China, a move that would be a sharp rebuke to Chinese censorship laws but also likely cost the Mountain View, Calif., company billions in future revenues.

A decision from Google appears imminent, as the Internet search giant’s Chinese service license comes up for renewal this month.

Despite reports that Google is “99.9 percent” certain, according to the Financial Times, that it will leave China over the country’s censorship laws, the company says it has not yet stopped filtering its Web searches after saying in January it would no longer adhere to the Chinese censors.

The duel represents perhaps the biggest showdown over Internet free speech, a growing priority in the Obama administration, as it brings to light not only China's tight controls on online information, but limitations on the Internet in many other countries, as well. Indeed, a Google departure from China would likely have broad implications on decisions by other American and European firms to open shop in authoritarian counties. China, the largest Internet market in the world, not only limits Google search results, but also blocks Facebook, YouTube, and Twitter.

In China, Google's move is seen as having political overtones, though the Obama administration has stayed out of the fight, and could have ramifications on US-China trade negotiations.

“[I]t’s imperative for governments, companies, and individuals to do more to ensure that the Internet continues to be a powerful medium for expressing political opinions, religious views, and other core speech without restriction,” Nicole Wong, vice president and deputy general counsel for Google, said last week at a Congressional hearing on cyberpolicy and online censorship.

The high-profile flap began after Google’s Chinese site was the target of a cyberattack in December. Ms. Wong said in Congressional testimony that the goal of that attack was to access Gmail accounts. Separately, Wong said, Google recently discovered that Gmail accounts belonging to Chinese human rights activists were regularly compromised.

“The attack on our corporate infrastructure and the surveillance it uncovered – as well as attempts over the past year to limit free speech on the Web even further – led us to conclude that we are no longer willing to censor our search results in China and we are currently reviewing our options,” she said.

It’s unknown, however, whether the attacks were state-sponsored.

Reports emerged this week that Google was already easing up on some Internet search restrictions. MSNBC found that sites concerning Tibet and Tiananmen Square that are normally blocked began turning up in searches on Google’s China site.

Google, however, said that it has not changed its China operation yet, and that the search results could have been alterations made by the Chinese government.

Wong said Google, a company whose motto was once “Don’t Be Evil,” was fully aware of China’s restrictive laws when it launched there in 2006. "[T]he belief that the benefits of increased access to information for the people in China and a more open Internet outweighed our discomfort in agreeing to censor some results," she said.

Chinese businesses that sell ads on Google pages are increasingly anxious over Google's pending decision, as they are already seeing sales dry up amid the dispute.

In a letter sent to Google this week, the businesses said "we really hope Google would face up to the problems and try to find ways to solve them."