The Rise Of The Corporation-State?

Yesterday, Google took to its blog to announce a major policy change in regards to China.  In the post, Senior Vice President David Drummer revealed a number of things: that Google had been the target of a coordinated, sophisticated cyber-attack from inside China; that the hackers had also targeted a number of other large companies; that the hackers had been routinely accessing the accounts of Chinese human-rights activists for some time; and that the attacks succeeded in some way or another.  As such, Google has decided to stop censoring search results inside China:

We launched in January 2006 in the belief that the benefits of increased access to information for people in China and a more open Internet outweighed our discomfort in agreeing to censor some results. At the time we made clear that “we will carefully monitor conditions in China, including new laws and other restrictions on our services. If we determine that we are unable to achieve the objectives outlined we will not hesitate to reconsider our approach to China.”

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down, and potentially our offices in China.

Three points:

First of all, attacks like this are extremely damaging for the exact companies to whom we are trusting with more and more of our lives.  This time, the hackers targeted what is possibly the largest collection of computer-science genius in existence – and they were still able to access some data.  What happens when this happens to a company less equipped to adapt?  We already know that Twitter can’t repel this kind of attack.  Could Facebook?  Could Amazon?  PayPal, Mint?  Companies are trying to convince us to store more and more of our information in the cloud, and for the most part, it’s to our advantage – Google Docs has made my life much easier.  But incidents like this are extremely damaging to their credibility, and are bad for both the consumer and the company.  Your local bookstore may not have the selection that Amazon does, but you’re unlikely to stop in one day and find that it’s been taken over by Iranians.

On a personal level, the timing of this is curious because I was the victim of a Gmail hacker in December.  I still haven’t figured out how they got ahold of my password, but my account was accessed by an IP address inside China on midmorning of Christmas Day.  However, since the hacker only used my account to send grammatically-questionable emails about Samsung TVs, and since I am hardly a Chinese human-rights activist (although I should hasten to add that I support them and bear them no ill will), I’m inclined to treat it as a coincidence.

Lastly, the dynamic between Google and China here is extremely interesting, because the two are engaging as equals.  Consider: after forming an uneasy treaty (that neither party was really comfortable with), Google opened a number of embassies inside China.  After a couple years of mounting tension, the Chinese government (from all appearances) launched a massive covert attack on Google’s infrastructure with an explicit political goal.  In response, Google revoked the terms of the treaty and is seriously considering withdrawing its (probably very uncomfortable) citizens from within China’s borders.

This appears, from the outside, to be an engagements between two states.  But Google isn’t a country; it’s a collection of computer geeks who hang out mostly in Mountain View and wear funny shoes.  (True story.)  Of course, since corporations became large enough to operate internationally, they’ve been intimately involved with the governing of countries where they have business interests – after Castro kicked Bacardi out of Cuba in the 60s, the company funded insurgencies against him.  (The corporation-state was also a major plot point in Robert Heinlein’s excellent novel Friday.)  But this is the first time, to my knowledge, that a modern power has engaged with a private corporation as if that corporation were in fact a state.  I don’t know what that means – but I think it means something.

(Photo credit: Alain Bachellier)