She noted that in China, dozens of companies signed a pledge in October to strengthen their "self-management, self-restraint and strict self-discipline.”
"Now, if they were talking about fiscal responsibility, we might all agree," Clinton said. "But they were talking about offering Web-based services to the Chinese people, which is code for getting in line with the government’s tight control over the Internet."
She said that protecting Internet freedom is an "urgent task" that requires international cooperation.
"Now, this enterprise isn’t a matter of negotiating a single document and calling the job done," she said. "It requires an ongoing effort to reckon with the new reality that we live in, in a digital world, and doing so in a way that maximizes its promise."
Although she focused on authoritarian regimes that want to restrict Internet freedom to maintain political control, she also warned democratic governments not to stifle the Internet in the name of combating cyber crime.
"And let me be clear: The challenge of maintaining security and of combating cyber crime, such as the theft of intellectual property, are real — a point I underscore whenever I discuss these issues," Clinton said, adding that governments can address the problem "without compromising the global network, its dynamism or our principles."
She also urged private companies not to allow themselves to become tools of oppressive governments.
She noted that companies have turned over information about political dissidents and shut down the social-networking accounts of activists. She said some companies are selling technology to governments that will use it repress their people.
"Now, in some instances, this cannot be foreseen, but in others, yes, it can," she said.
Eric Schmidt, Google's executive chairman, also spoke at the conference on Thursday.