Google: We will pull out of China before accepting country's censorship laws

Google said it is fully prepared to shut down its China operation if that is the only way to end the country's censorship of its networks.

"Google is firm in its decision to stop censoring in China," said Nicole Wong, Google's deputy general counsel, in a hearing today before the House Committee on Foreign Affairs. "We do not underestimate the seriousness or sensitivity of the decision is made...We are not going to change our decision."

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"If the option is that we shutter our .cn operation and leave the country, we are prepared to do that," she said.

Many lawmakers on the panel applauded Google for taking such a stand against China's restrictive Internet rules. But Wong was questioned about Microsoft's position.

Wong said she is puzzled by Microsoft CEO Steve Ballmer's recent statement that the company would not alter or eliminate its business operations in China.

"It is not consistent with the discussions we've been having with Microsoft," Wong said.

In January, Ballmer told CNBC that Microsoft intends to stay in China.

"We've been quite clear that we are going to operate in China, (and) we're going to abide by the law," he said after a meeting at the White House. "Cyberattacks are an unfortunate way of life."

Google, Microsoft and other technology firms including Yahoo are members of the Global Network Initiative, an organization that aims to ensure human rights laws are respected by the technology community around the world.

The group has kept a low-profile over the past year or so, but it was thrust back into the spotlight when Google said it had been the target of a highly sophisticated state-sponsored cyber attack originating from China.

After months without leadership, GNI this week announced Susan Morgan, who ran corporate responsibility and policy for British Telecommunications, as its first executive director. The group also formed a board of directors, including representatives from Google and Microsoft.

Rebecca MacKinnon of Princeton University and a GNI member, agreed that Ballmer's public stance on China is "indeed extremely puzzling."

"Every business is different," she said. "We're not saying Microsoft should follow exactly what Google does in all situations. However, Microsoft at a working level has been trying to implement greater transparency" when it comes to censorship in restrictive countries.

Rep. Dana Rohrabacher (R-Calif.) passionately criticized all technology companies that sell or provide censorship-enabling technologies to oppressive governments. Rep. Chris Smith (R-NJ) called out Cisco for supplying China with routers and other equipment that enables action that violates human rights.

"When companies fall over themselves trying to sell computers to the police in China and claim it is a neutral party," they are facilitating harmful action, he said. "The Gestapo and police in Nazi Germany are not the same as the police in London or the United States."

Rohrobacher said he's a "proud supporter" of Smith's Global Online Freedom Act, which would require companies to be more transparent about what kind of online content it is blocking in certain countries and why.

"I would hope corporate America starts making some moral stands in that way too," he said. "If it wasn't for our government and our country standing up for the principles of freedom, none of your organizations would have the opportunity to make any money."

Rep. Howard Berman, (D-Calif.), Chairman of the committee said he is disappointed more companies have not joined GNI.

"As a result, we may consider legislation to address this issue," he said. "Providers of technology need to step up."