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Internet titan Yahoo! (YHOO) is girding for growth in Vietnam. But as it expands in the Southeast Asian country, it's taking steps to avoid becoming an accomplice to government efforts to restrict citizens' use of the Web there.
Vietnam is among emerging markets that represent expansion prospects for Yahoo. More than 95% of the country's 18 million Internet users have Yahoo instant messaging and e-mail, according to a study conducted with researcher TNS. Yahoo is helping to fund Internet cafÉs in parts of Ho Chi Minh City and elsewhere. And the popularity of its blogging platform prompted the launch of a Vietnamese-language version, Yahoo 360plus, in May 2008.
Yet Yahoo's expansion comes just as Vietnam calls for tighter restrictions on citizens' online activities. Last fall the government created the Administration Agency for Radio, Television & Electronics, a unit charged with keeping watch of the Internet, and issued a federal edict that raised the penalty for criticism of the government posted to the Web. According to Paris-based human rights group Reporters Without Borders, the rules also carry an implicit request for Internet service providers such as Yahoo to provide data and reports on users.
In a March report, Reporters Without Borders included Vietnam on its annual list of countries it considers "enemies" of the Internet. The group cited the 30 "cyber dissidents" Vietnam has jailed since 2002—seven of whom remain behind bars—and criticized Do Quy Doan, the country's Deputy Minister for Information & Communications, for a statement he made in February that "a blog is a personal news page. If a blogger uses it for general news like the press, he is breaking the law and will be punished." Vietnam's Ministry of Information & Communications did not respond to a request for comment.
Yahoo's response to the government's stance on citizens' Web use reveals the tightrope Internet companies must walk when they do business in countries that may be viewed as intolerant of free online speech and government criticism on the Web. Companies that run afoul of government rules risk having operations curtailed, if not shut down. Those that comply with restrictive government agencies are lambasted by free speech and human rights advocates.
Yahoo's Chinese operations have come under criticism for providing information to authorities in 2004 that critics say led to a 10-year prison sentence for journalist Shi Tao. China Yahoo is operated by Alibaba.com, minority-owned by Yahoo. "We've learned tough lessons as pioneers in the emerging markets, and we've also taken that and tried to be a leader in business and human rights," says Michael Samway, vice-president and deputy general counsel of Yahoo.
Vietnamese authorities have not contacted Yahoo to ask it to cooperate with the new standards, Yahoo says. Indeed, the fine print may excuse non-Vietnamese companies altogether. "We haven't yet seen action steps from the government suggesting they intend to apply these regulations to foreign Internet companies," Samway says. Still, the company is taking steps it hopes will help it avoid having to comply with rules it considers restrictive. For one, Yahoo located the servers for its Vietnamese-language services in Singapore.
In April 2008, Vietnamese authorities arrested politically outspoken blogger Nguyen Hoang Hai, who was charged with tax evasion. Human rights groups say the arrest was meant to put a chill on other online criticism of the government. "They cannot put all of the political bloggers in jail," says Vincent Brossel, who covers Asian affairs for Reporters Without Borders. "But they catch the most prominent and the most vocal, and the people who write about strong issues—that's how they work."
Colin Maclay, managing director of Harvard's Berkman Center for Internet & Society, says public criticism of the Vietnamese government might backfire, presaging a "showdown" with Internet companies whose tools are used by dissident bloggers.
Yahoo is taking other steps aimed at preparing for confrontations with foreign governments. Last October it came together with Google (GOOG), Microsoft (MSFT), the Berkman Center, and a variety of nonprofits to discuss what steps should be taken to handle requests from foreign governments. The consortium, called the Global Network Initiative, has met regularly to discuss these issues, has held public forums, and has issued reactions to events in the news, such as the blocking of Google's YouTube in China.
In addition to locating its servers in Singapore, Yahoo says it has adapted its terms of service and legal structures to prepare for any action by the government. "We take into consideration local customs and norms where we do business, but we don't bend on our principles," Samway says. He adds that the influence of foreign businesses is greater on developing nations such as Vietnam than in the more robust economy of China.
The tension in Vietnam has drawn the interest of other parties, including the U.S. government. On Mar. 31, Loretta Sanchez (D-Calif.) and 11 other members of the U.S. House of Representatives sent a letter to Yahoo CEO Carol Bartz urging the company not to comply with any requests from the Vietnamese government to aid in its censorship. Yahoo's Samway responded, writing: "We look forward to continuing to engage with you" on the topic.
Yahoo is not the only company treading gingerly in Vietnam. Google offers its search, Picasa photo sharing, and Google Groups service, but it does not provide access to its Blogger service on the local country domain. Nor does it store personal data on Vietnamese users. "When we decided to provide our products and services in Vietnam, we tried to do so in a way that would protect Vietnamese users from their government's efforts to censor online speech," says Nicole Wong, deputy general counsel for Google. Social networking site Facebook, which was translated into Vietnamese in December and has seen a recent uptick in activity in the country, declined to comment for this story.
Protecting access to these sites remains a top priority for many. "When you don't have the right to assembly, when you don't have free speech, when you don't have freedom of the press, one of the freest places to get information about the outside world is the Internet," says U.S. Representative Sanchez.
Douglas MacMillan is a staff writer for BusinessWeek in New York.