Michigan Journal of International Law

Volume 34 Issue 4

2013

A Dual Track Approach to Challenging Chinese Censorship in the WTO: The (Future) Case of Google and Facebook

Anonymous

Follow this and additional works at: https://repository.law.umich.edu/mjil

Part of the Intellectual Property Law Commons, International Trade Law Commons, Internet Law Commons, Organizations Law Commons, and the Science and Technology Law Commons

Recommended Citation Anonymous, A Dual Track Approach to Challenging Chinese Censorship in the WTO: The (Future) Case of Google and Facebook, 34 MICH. J. INT'L L. 857 (2013). Available at: https://repository.law.umich.edu/mjil/vol34/iss4/4

This Note is brought to you for free and open access by the Michigan Journal of International Law at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Michigan Journal of International Law by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. 34040-mil_34-4 Sheet No. 96 Side A 10/10/2013 11:12:26 R R R R R R R R R R R R RADE T ORLD ... 880 See Understand- ..... 873 , W RACTICAL P ENSORSHIP ., http://www.wto.org/english/the ENSORSHIP RG O PRC C PRC C RADE EGAL AND T ...... 860 L 857 ...... 870 ...... 870 HE TO THE ORLD ROHIBIT Anonymous* NTRODUCTION : T , W FFAIRS I P A TRIPS RACTICES ...... 890 NALYSIS P ...... 883 ...... 887 ...... 865 A TATE OF BLIGATIONS S ...... 888 GOOGLE AND FACEBOOK GOOGLE ...... 857 ...... 891 ARKET A DUAL TRACK APPROACH TO TRACK APPROACH A DUAL Preliminary Steps to Examining the PRC’s Preliminary Steps Commitment Schedule Schedule Application of the PRC’s Commitment Principle Application of the Most Favored Nation Clause: Defenses to the Most Favored Nation Step One Clause: Defenses to the Most Favored Nation Step Two THE WTO: THE (FUTURE) CASE OF CASE THE (FUTURE) THE WTO: PPLICATION OF EGIME NFORCEMENT RAMEWORK OLICIES AND RESENT Understanding the WTO: What Is the World Trade Organization? R E A M F GATS O P A. B. C. D. E. A P The WTO is perhaps best known for its dispute settlement mecha- The WTO is perhaps best known for When countries cannot reach a mutual resolution to a conflict When countries cannot reach a 1 2 CHALLENGING CHINESE CENSORSHIP IN CENSORSHIP CHINESE CHALLENGING I. As economic and trade policies continue to affect more facets of soci- As economic and trade policies continue * “A censor is a man who knows more than he thinks you ought to.” ., http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm (last visited July 21, V. II. 1. 2. News headlines and public attention mainly focus on the relatively few issues that III. IV. ONCLUSION RG NTRODUCTION M K wto_e/whatis_e/tif_e/disp1_e.htm (last visited July 21, 2013) (“[T]he point is not to pass - Granville Hicks O 2013). the are submitted to a WTO panel for judgment. Most disputes, however, are settled without use of formal legal proceedings or never even rise to the point of discussion. C ing the WTO: A Unique Contribution I \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 1 10-OCT-13 10:02 ety, the World Trade Organization’s (WTO) impact on government policy ety, the World Trade Organization’s its creation on January 1, 1995, the and citizens’ lives has grown. Since negotiations and served as a forum WTO has fostered trade liberalization economic concerns with one an- where member countries can discuss other. nism. C Y 34040-mil_34-4 Sheet No. 96 Side A 10/10/2013 11:12:26 A 10/10/2013 96 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 96 Side B 10/10/2013 11:12:26 M K C Y Id. If See 5 RADE 34:857 T 10 [Vol. Id. ., http://www ORLD RG , W O The panel then The panel The agreement 3 7 6 RADE Id. T If a country has not already Id. ORLD , W A Working Party is then created, Id. The accession process is time consuming The accession process The panel’s report is automatically adopted by the The panel’s report is automatically adopted The ruling simply identifies which, if any, simply identifies The ruling 9 4 Id. The Working Party establishes the final terms of accession and Id. Michigan Journal of International Law It is extremely unlikely that a consensus not to adopt the resolution will It is extremely unlikely that a consensus not Such compensation can come in the form of removing the illegal practices, Such compensation can come in the form of Id. Id. The process is simplified for the purposes of this Note. In actuality, the panel The process is simplified for the purposes of This process is also simplified for the purposes of this Note. In practice, the This process is also simplified for the purposes Bilateral negotiations must take place between the applicant and any interested Id. Understanding the WTO—membership, alliances, and bureaucracy Understanding the WTO: The Uruguay Round Id. Id. Id. Countries subsequently looking to attain WTO membership must looking to attain WTO membership Countries subsequently Id. 8 The current dispute settlement mechanisms were created as a part of settlement mechanisms were created The current dispute ., http://www.wto.org/english/thewto_e/whatis_e/tif_e/org3_e.htm (last visited July 21, 8. 9. 7. 5. 6. 3. of a panel after it has exhausted A member country may request the appointment 4. 10. The process has been summarized. In greater detail, the process starts when a RG .wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm (last visited July 21, 2013). .wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm Dispute Settlement Body after sixty days unless a consensus to the contrary arises among the Dispute Settlement Body after sixty days unless WTO members. Body is composed of all the WTO member take place given that the Dispute Settlement to change its mind. governments and the winning party is unlikely losing party must enter into negotiations with the prevailing party to find an agreement on losing party must enter into negotiations with compensation. the prevailing party, or monetary payments. reducing restrictions on an area of interest to id. issues an interim decision for the parties to comment on and the Dispute Settlement Body issues an interim decision for the parties to chooses to adopt the panel’s report. presents it to the General Council or Ministerial Conference. A two-thirds majority vote of presents it to the General Council or Ministerial Conference. A two-thirds majority vote the WTO membership is required to approve the accession. consisting of any interested WTO members, to examine the applicant and make recommen- dations. Working Party members. O 2013). country files a formal written request for accession. judgement. The priority is to settle disputes, through consultations if possible. By January judgement. The priority is to settle disputes, had reached the full panel process. Most of the 2008, only about 136 of the nearly 369 cases of court’ or remain in a prolonged consultation rest have either been notified as settled ‘out phase—some since 1995.”). with the country whose policies are at issue. the mandatory sixty-day consultation period 858 proceedings formal legal initiate they can trade agreement, by a governed appointed. for a panel to be another by asking against one of a panel for whatever reason it sees fit, The defending country can block the appointment Settlement Body consensus. but this can only be done once without a Dispute \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 2 10-OCT-13 10:02 formally accede to the scheme. formally accede to the WTO through the Uruguay Round of negotiations. the WTO through WTO obligations are being breached, but does not impose punishment. breached, but does are being WTO obligations a formal applica- other things, the applicant to make and requires, among interested WTO terms individually with every tion, negotiate bilateral agreements. all of the WTO multilateral trade member, and adopt hears the complaint and issues a ruling, which may be appealed by either may be appealed a ruling, which complaint and issues hears the on legal grounds. of the parties was signed by the 123 governments that served as the first members of the 123 governments that served as the was signed by the WTO. the losing country does not move to conform to its WTO obligations, the to its WTO obligations, move to conform country does not the losing the Dispute Settle- may request permission from other member country granted within thirty trade sanctions, which must be ment Body to impose of member countries disagrees. days unless a consensus 34040-mil_34-4 Sheet No. 96 Side B 10/10/2013 11:12:26 B 10/10/2013 96 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 97 Side A 10/10/2013 11:12:26 R , 13 859 EUTERS , R HINA AND THE , 112th Cong. 15 ., RS20139, C ERV S ESEARCH Understanding the WTO: Members and Observ- note most important features of 11, at 2. The The most high profile situations involve The most high profile . R 14 As the growing “information age” capital As the growing “information ONG supra 15 ., All three agreements require the PRC to im- All three agreements , C 12 A Dual Track Approach Track A Dual 2–3 (2001); ERV see also Accession: How to become a member of the WTO see also Accession: How to become a member ; S ., http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm Id. ORRISON As part of its accession, the PRC government was also PRC government its accession, the As part of RG Google Helps Build Trade Case Over Web Censorship 11 ., http://www.wto.org/english/thewto_e/acc_e/acces_e.htm (last visited ., http://www.wto.org/english/thewto_e/acc_e/acces_e.htm O ESEARCH RG RGANIZATION M. M . R O O RADE http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg72895/html/CHRG-112hhrg72895 at 14. T AYNE ONG RADE Id. China’s Censorship of the Internet and Social Media: The Human Toll and Trade RADE T T ORLD The People’s Republic of China (PRC) acceded to the WTO in 2001, to the WTO acceded (PRC) of China Republic People’s The 13. John Poirier, 15. 12. C 11. W 14. , W ORLD ORLD M K GATT and GATS are “Most-Favored-Nation Treatment,” which disallows members from GATT and GATS are “Most-Favored-Nation lowering import restrictions, and the National discriminating between member countries in from discriminating between domestic and Treatment provision, which disallows a member the country. General Agreement on Trade imported goods and services once they are inside Agreement Establishing the World Trade and Services arts. II, 17, Apr. 15, 1994, Marrakesh 33 I.L.M. 1167 [hereinafter GATS]; General Organization, Annex 1B, 1896 U.N.T.S. 183, I–III,arts. A–11, Oct. 30, 1947, 61 Stat. Trade 55 U.N.T.S. 194 and Tariffs on Agreement contain concession schedules, wherein mem- [hereinafter GATT]. The two agreements also and services. GATS art. XX; GATT art. II. bers detail their treatment of important goods right protections and enforcement provisions. TRIPS lays out minimum intellectual property Property Rights, Apr. 15, 1994, Mar- Agreement on Trade-Related Aspects of Intellectual Trade Organization, Annex 1C, 1869 U.N.T.S. rakesh Agreement Establishing the World Agreement]. 299, 33 I.L.M. 1197 (1994) [hereinafter TRIPS (2012) (statement of Gilbert B. Kaplan, President, Committee to Support U.S. Trade Laws), available at .htm. Impact: Hearing Before the Congressional-Executive Commission on China ers (last visited July 21, 2013). July 21, 2013) (“Terms and conditions include commitments to observe WTO rules and disci- July 21, 2013) (“Terms and conditions include plines upon accession . . . “). (June 11, 2010), http://www.reuters.com/article/2010/06/11/us-google-trade-idUSTRE65A6A D20100611?type=technologyNews&feedType=RSS&feedName=technologyNews&utm_ source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2Ftechnology News+(News+%2F+US+%2F+Technology)&utm_content=Google+Reader. W W The PRC’s censorship regime is estimated to cost U.S. businesses billions regime is estimated to cost U.S. The PRC’s censorship a year. of dollars in lost revenue law, it must ratify the final terms of accession translated its WTO requirements into domestic to complete the process. Summer 2013] \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 3 10-OCT-13 10:02 following its successful trade negotiations with WTO members, principally WTO members, negotiations with its successful trade following States. the United required to adopt the WTO’s multilateral trade agreements, including the agreements, including multilateral trade to adopt the WTO’s required on General Agreement and Trade (GATT), on Tariffs General Agreement Intellectual Aspects of and Trade-Related Services (GATS), Trade in Property Rights (TRIPS). plement domestic laws and regulations in conformity with the agreements. laws and regulations in conformity plement domestic from Western U.S. corporations and under criticism To the ire of many censorship. PRC has continued a policy of Internet media, however, the the Internet gi- United States will likely seek to protect of the world, the best chance at doing to its economic future and its ants that are so central WTO. so is through the Google and Facebook, each of which receives varying degrees of censor- each of which receives varying Google and Facebook, ship by the PRC government. C Y 34040-mil_34-4 Sheet No. 97 Side A 10/10/2013 11:12:26 A 10/10/2013 97 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 97 Side B 10/10/2013 11:12:26 R M K C Y The 34:857 , http:/ 17 [Vol. ARKETWATCH Let’s Get This Straight: , M FFAIRS A , http://www.marketwatch.com/investing/ (Dec. 21, 1998, 3:00 PM), www.salon.com/1998/ TATE OF GOOG Company Profile note 17; Scott Rosenberg, S ALON ARKETWATCH supra , S , From early 2000 to the fall of 2002, Google From early 2000 to the fall of 2002, , M 18 RESENT Thus, while the road ahead for a U.S. claim against Thus, while the road ahead for a U.S. I. P 16 Michigan Journal of International Law Understanding on Rules and Procedures Governing the Settlement of Dis- GOOG Company Profile FB Company Profile See This Note focuses on the most publicized instances of censorship in This Note focuses on the most publicized This Article details the dual-track approach that the United States the United that approach dual-track details the Article This Google was founded in 1998 to serve as a strong competitor to Yahoo Google was founded in 1998 to serve 18. 17. 16. Yes, There is a Better Search Engine /www.marketwatch.com/investing/stock/GOOG/profile (last visited July 21, 2013) . stock/FB/profile (last visited July 21, 2013); 12/21/straight_44/. putes art. 22, cl. 3(a), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401 [hereinafter DSU]. 860 \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 4 10-OCT-13 10:02 the PRC, namely that of California-based Google and Facebook. the PRC, namely that of California-based could adopt in a WTO case against the PRC’s censorship regime on behalf censorship regime against the PRC’s in a WTO case could adopt and the current situation this Note details and Facebook. First, of Google in the and Facebook regarding Google recent developments tracks the by analyz- are examined of the PRC market the intricacies PRC. Second, both of local PRC practices, legal issues and domestic ing the relevant by utilizing the and Facebook’s operations. Third, which affect Google Note concludes that and pertinent WTO law, this PRC’s GATS schedule its WTO obligations. policies are incompatible with the PRC’s censorship will reveal that the examination of the present situation Concurrently, an the PRC govern- also pursue a TRIPS claim against United States could States will likely censorship regime. While the United ment for its strict such a success is its legal arguments against the PRC, prove successful in the United States end of the trade dispute. Instead, unlikely to mark the of legal maneu- need to engage in a complex series will almost assuredly normally requires judgment as current WTO law vers to enforce a positive trade as the viola- to be taken in the same sector of retaliatory measures tion complained of. Chinese censorship may be a long one, it could ultimately be a successful Chinese censorship may be a long one, one for the U.S. economy. experienced almost no obstacles to providing its services to the Chinese experienced almost no obstacles to Chinese language version of Google market, and it was estimated that the discussion of Google will focus on its most popular products, including its discussion of Google will focus on its This Note will then focus on search engine, GMail, and YouTube. A brief history of both companies’ Facebook’s social networking services. the PRC market will be discussed to involvement and legal presence in the widely-publicized pre- provide background and context. Subsequently, regarding Google and Facebook in sent state of affairs and circumstances dramatically these corporations and, in China will be detailed to show how affected by the PRC’s practices. turn, the U.S. economy, have been and other search engines. 34040-mil_34-4 Sheet No. 97 Side B 10/10/2013 11:12:26 B 10/10/2013 97 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 98 Side A 10/10/2013 11:12:26 R In 861 20 see also With de- HANGHAIIST 21 , S Furthermore, 25 By the end of 2002 end of By the (July 9, 2010, 1:29 PM), 19 IMES . T IN , F , “Google China”), available at China”), available , “Google ( (Feb. 19, 2008), http://news.brisbanetimes.com.au/ (Sept. 2, 2002, 12:07 PM), http://news.bbc.co.uk/2/hi/ IMES guge Contrast this to a similar situation encoun- Contrast this to T EWS 23 A Dual Track Approach Track A Dual Edison Chen sex scandal: Witchhunt Hits China ), the “Chinese Google,” which actively advertised, ), the “Chinese Google,” RISBANE For Google China, the future appeared bright. For Google China, , BBC N A History of Google in China , B 22 note 19. This information is provided for background purposes and to note 19. This information is provided for background China’s Top Internet Search Engine, Baidu.com, Censured for Allegedly (detailing the timeline of Google China, which shows that access to Google (detailing the timeline of Google China, which supra required to censor itself, but simply suffered discriminatory demands by the required to censor itself, but simply suffered Kenneth Tan, See id. Id. Id. See 24 legally Baidu’s slap on the wrist consisted of an official government censure Baidu’s slap on the wrist consisted In June of 2009, however, Google China’s operations came to a however, Google China’s operations In June of 2009, 20. 21. Lau, 22. 23. 24. 25. Min Lee, 19. Justine Lau, M K within the PRC was only continuous after it removed links to human rights stories); within the PRC was only continuous after it China Blocking Google http://www.ft.com/intl/cms/s/0/faf86fbc-0009-11df-8626-00144feabdc0.html#axzz2JrdclBiS version of Google.com. But the website, (“2000- Google begins offering a Chinese-language of the time, is slow and unreliable, apparently which cannot be accessed about 10 per cent by China’s licensed internet service providers.”). because of the extensive filtering performed reveal the true reason why Google China was founded. As will be explained later, Google reveal the true reason why Google China was was not technology/2231101.stm (“Analysts say this is the first time Beijing has blocked access to an technology/2231101.stm (“Analysts say this is Party congress in November which is internet search engine. It comes ahead of a Communist leadership.”). expected to see sweeping changes to the country’s CCP. technology/chinas-top-internet-search-engine-baiducom-censured-for-allegedly-spreading- racy-photos-20080219-1t4r.html. (Feb. 21, 2008, 12:03 AM), http://shanghaiist.com/2008/02/21/edison_chen_sex.php (“[T]he not government-sponsored Beijing Association of Online Media . . . has censured Baidu for blocking what it referred to as ‘dirty pictures.’”). Spreading Racy Photos Summer 2013] of the time. 90% approximately was available .com \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 5 10-OCT-13 10:02 and a requirement that Baidu apologize for its actions. and a requirement that Baidu apologize disseminated, and profited from Chinese-language searches for porno- profited from Chinese-language disseminated, and the now infamous Edison Chen sex graphic images and videos during scandal. screeching halt. After being accused of allowing individuals to search for being accused of allowing individuals screeching halt. After by suspending PRC government “punished” Google pornography, the well-known foreign websites and utilize Google’s users’ ability to search associate search function. tered by Baidu ( google.cn, in January, 2006, to cater to both the Chinese market and CCP the Chinese market to cater to both in January, 2006, google.cn, itself. China would be censored by Google officials as Google and continuing into 2003, however, Google was blocked to PRC users for blocked to PRC Google was into 2003, however, and continuing wished to Party (CCP) the Chinese Communist of time as various periods to the party’s interests. that was harmful to information limit access Baidu was one of China’s largest violators of copyrights, generating a sub- Baidu was one of China’s largest violators providing access to copyright- stantial portion of its revenue by knowingly response, Google launched Google launched response, drove Google’s Google China, PRC citizens quickly pendable access to to over 35% within share from approximately 10% market and revenue three fiscal years. C Y 34040-mil_34-4 Sheet No. 98 Side A 10/10/2013 11:12:26 A 10/10/2013 98 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 98 Side B 10/10/2013 11:12:26 R M K C Y 34:857 The , CRN 29 While . J., Mar. UARDIAN T 30 S [Vol. , G ALL (Dec. 30, 2010, China’s Baidu to , W EUTERS (Feb. 28, 2008, 1:40 AM), , R 28 ORBES , F (Apr. 1, 2011), http://www.digitaltrends Baidu Takes Authors’ Fire RENDS Leaked Cables Offer Raw Look at U.S. Diplo- T While it appears that many of Google’s appears that many While it 27 IGITAL , D RSA: Aurora Hackers Targeted Google Source Code RSA: Aurora Hackers Targeted Google Source Look Who’s Suing Baidu Google Hack Attack Was Ultra Sophisticated, New Details Google Hack Attack Was Ultra Sophisticated, It is unclear how logical it was to block Google to block it was how logical unclear It is 26 Michigan Journal of International Law note 19. US Embassy Cables Leak Sparks Global Diplomatic Crisis , Nov. 28, 2010, at A1. “[T]he hacker attacks which forced Google to quit supra (Jan. 14, 2010, 8:01 PM) http://www.wired.com/threatlevel/2010/01/operation- Stefanie Hoffman, Press Release, Int’l Fed’n Phonographic Indus., Baidu Faces Potential Multi- Phonographic Indus., Baidu Faces Potential Press Release, Int’l Fed’n IMES See See China Shuts Over 60,000 Porn Websites This Year See China Shuts Over 60,000 Porn Websites See IRED , W , N.Y. T After a continued pattern of outages, the symbolic straw that broke pattern of outages, the symbolic straw After a continued 29. 28. Lau, 27. 30. Scott Shane & Andrew W. Lehren, 26. 29, 2011, at B7. Baidu has since responded by paying some royalties, but this did not occur 29, 2011, at B7. Baidu has since responded by Geoff Duncan, until only recently and does not cover all copyright-holders. pay royalties on downloaded songs (Mar. 4, 2010, 2:28 PM), http://www.crn.com/news/security/223101584/rsa-aurora-hackers-tar Op- geted-google-source-code.htm;jsessionid=faXYaQTlXMSYH8EKMB8bFg**.ecappj01. through encryption, security flaw exploita- eration Aurora combined “unprecedented tactics” access intellectual property and user account tion, and “stealth programming” seeking to largest companies, including Google, Adobe, information from several of the United States’ and many more. Kim Zetter, Show http://www.forbes.com/2008/02/28/china-baidu-piracy-markets-equity-cx_0228markets1.html. for its document-sharing services, which Baidu was also sued by authors and publishers hosted unlicensed digital books. Loretta Chao, 12:13 AM), http://www.reuters.com/article/2010/12/30/china-internet-idUSTOE6BT01T20101 230. .com/international/chinas-baidu-to-pay-royalities-on-downloaded-songs/. macy Billion Dollar Liability for Breaching Music Copyrights (Apr. 7, 2008), http://www.ifpi.org/ for Breaching Music Copyrights (Apr. 7, Billion Dollar Liability the Music Copyright Society of China and content/section_news/20080407.html. In 2008, links on its own website that could directly R2G sued Baidu for streaming and providing complaint alleged that Baidu “stealthily pro- download the MP3 to a user’s computer. Their via its Web site, and thus earn signifi- vide[s] unlicensed music streaming and downloading traffic brought about by its music download cant advertising revenues via its massive online service.” Shu-Ching Jean Chen, aurora/ (“ ‘We have never ever, outside of the defense industry, seen commercial industrial companies come under that level of sophisticated attack,’ says Dmitri Alperovitch, vice presi- dent of threat research for McAfee. ‘It’s totally changing the threat model.’ “). China in January were orchestrated by a senior member of the Politburo who typed his own name into the global version of the search engine and found articles criticizing him person- ally.” David Leigh, (Nov. 28, 2010, 1:13 PM), http://www.guardian.co.uk/world/2010/nov/28/us-embassy-cable- leak-diplomacy-crisis. 862 material. infringing \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 6 10-OCT-13 10:02 the camel’s back was a series of organized attacks targeting U.S. websites, a series of organized attacks targeting the camel’s back was Aurora.” in an operation dubbed “Operation including Google, China’s website as literally tens of thousands of domestic Chinese pornog- of domestic Chinese tens of thousands as literally China’s website though the PRC public even accessible to remained easily raphy websites knew of them. the government features regained functionality over the next few months, Google’s ser- few months, Google’s over the next regained functionality features China. as blocked in regularly reported vices were PRC government recruited a well-organized group of hackers as “part of a recruited a well-organized group of PRC government out by government of computer sabotage carried coordinated campaign . . . .” security experts and Internet outlaws operatives, private of these attacks, been willing to downplay the costs U.S. companies have 34040-mil_34-4 Sheet No. 98 Side B 10/10/2013 11:12:26 B 10/10/2013 98 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 99 Side A 10/10/2013 11:12:26 R R 36 AG . J. 863 T (Jan. S OOGLE Google IMES (Mar. 22, ALL , PC M , G 31 . T , W IN Soon after, (Jan. 12, 2010, Several days 33 , F EGISTER LOG 34 R B HE , T DOBE , A but that the hackers had but that 32 A New Approach to China Google Hackers Had Ability to Alter Google in Industry’s “Defining Fight” Google’s estimated market share of Google’s estimated 38 , http://www.google.com/intl/en/about/corporate/ OOGLE In reality, however, this requires extra effort In reality, however, (Oct. 12, 2012, 12:37 AM), http://uk.reuters.com/article/ David Drummond, 35 , G A Dual Track Approach Track A Dual The Chinese Dissident’s ‘Unknown Visitors’ Google: We’re Committed to Not Censoring in China Google: We’re Committed to Not Censoring Google Stops Hong Kong Auto-Redirect as China Plays Hard- Google Stops Hong Kong Auto-Redirect as EUTERS note 29 (explaining that valuable intellectual property was note 29 (explaining that valuable intellectual see also , R Researcher Says Up to 100 Victims in Google Attack Researcher Says Up to 100 Victims in Google supra (Mar. 4, 2010, 11:05 PM), http://www.wired.com/threatlevel/2010/03/ note 19. , 37 (June 29, 2010, 11:53 AM), http://arstechnica.com/tech-policy/2010/06/ IRED supra Jacqui Cheng, Jamil Anderlini, , W See See Our History in Depth See Zetter Adobe Investigates Corporate Network Security Issue Adobe Investigates Corporate Network Security RSTECHNICA Google Redirects China to Uncensored Hong Kong Servers Google Redirects China to Uncensored Hong (Jan. 12, 2010), googleblog.blogspot.com/2010/01/new-approach-to-china.html; Pooja (Jan. 12, 2010), googleblog.blogspot.com/2010/01/new-approach-to-china.html; Google’s operations in China have certainly strained under the mas- in China have certainly strained Google’s operations (Mar. 2, 2010, 2:28 PM), http://www.pcmag.com/article2/0,2817,2360848,00.asp; Cade (Mar. 2, 2010, 2:28 PM), http://www.pcmag.com/article2/0,2817,2360848,00.asp; , A 36. 33. Ben Worthen, 32. 35. Chloe Albenesius, 37.38. Lau, The Chairman of Google, Eric Schmidt, recently detailed how Google China is 34. 31. LOG M K COM ball Source Code (Feb. 26, 2010, 7:15 PM), http://online.wsj.com/article/SB1000142405274870462500457509011 Zetter, 1817090670.html?mod=googlenews_wsj; Kim 2010, 9:32 PM), http://www.theregister.co.uk/2010/03/22/google_redirects_china_to_hong_ kong/. 15, 2010, 1:34 AM), http://www.ft.com/intl/cms/s/2/c590cdd0-016a-11df-8c54-00144feabdc0 .html#axzz2IvOipJ86. 3:16 PM), blogs.adobe.com/conversations/2010/01/adobe_investigates_corporate_n.html. company/history.html (last visited July 21, 2013). with Apple, Schmidt Says google-tweaks-china-to-hong-kong-redirect-same-results/. unlikely to recover anytime soon. Alexei Oreskovic, 2012/10/11/us-google-android-idUKBRE89A03120121011 (“Schmidt also said he did not ex- 2012/10/11/us-google-android-idUKBRE89A03120121011 (“Schmidt also said he did not pect Google to become a significant player in China any time soon, following its 2010 stand- off with the government over Web censorship and cyber-attacks that Google said originated al- in China. Google relocated its search engine to Hong Kong in the wake of the episode, in lowing Chinese search engine Baidu Inc. to widen its lead in China, one of the few markets the the world where Google’s search engine is not dominant. ‘Baidu will continue to be Number One player in China for a long time,’ Schmidt said. He said that he did not expect targeted by the hackers); source-code-hacks/. Metz, Prasad, . In an effort to save face from intense international criticism, China re- face from intense international In an effort to save legal status re- operating license, but its long-term newed Google China’s mains in doubt. B Summer 2013] was immense. Google, including U.S. companies, to the damage \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 7 10-OCT-13 10:02 sive weight of the PRC government. sive weight of the by any PRC user in utilizing Google because Google China, itself, is not in utilizing Google because Google by any PRC user Kong’s URL. them to reconnect to Google Hong functional but requires succeeded in stealing some of Google’s intellectual property about how its property about of Google’s intellectual in stealing some succeeded were designed. systems algorithms and operating websites’ Google responded to the PRC government by announcing that they would announcing that government by to the PRC Google responded Google China’s search results. discontinue self-censoring Google announced for their workforce in the PRC, later, out of concern Hong Kong, allow users to redirect to Google that they would simply which remains uncensored. reported that not only were the contents of some of its users’ e-mails re- some of its users’ the contents of that not only were reported Ai Weiwei, the then-jailed vealed, including C Y 34040-mil_34-4 Sheet No. 99 Side A 10/10/2013 11:12:26 A 10/10/2013 99 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 99 Side B 10/10/2013 11:12:26 M K . C Y ASH (Jan. DVO- , L.A. (Aug. 34:857 A , W (Jan. 5, and in EWS 45 ORLD [Vol. OICES HINA V C There is un- There is , BBC N , PCW 42 ), host massive LOBAL as potential busi- as potential 40 , G ESONANCE and politically subver- , R 43 Although not the focus of the focus not Although 39 , CNN (Mar. 25, 2009), http://articles It is clear from this short but It is clear from (Mar. 24, 2010, 8:48 AM), http://www 44 TUFF ) and YouKu ( , S http://articles.latimes.com/2010/feb/14/business/la-fi-himi- (Sept. 30, 2012), http://wallstcheatsheet.com/stocks/will-chi- The Man Behind the Chinese Equivalent of YouTube China: Facebook Blocked? Not quite! Currently, a minority of PRC web users has access Currently, a minority of PRC web users China Video Site Promotes Legitimate Content YouTube Blocked in China China Blocks Access to Twitter, Facebook After Riots 46 HEET S Michigan Journal of International Law available at Will China’s Popular Video Platform Compete with YouTube in the Will China’s Popular Video Platform Compete HEAT Google Postpones China Mobiles After Censorship Row Google Postpones China Mobiles After Censorship , . C T David Pierson, Michael Kan, John Kennedy, S CACY See See, e.g. See China Firm Boycotts Google See See Baidu and Google Lead in Internet Market Share Baidu and Google Lead in Internet Market ALL Furthermore, YouTube, a wholly-owned subsidiary of Google, has of Google, wholly-owned subsidiary YouTube, a Furthermore, 41 , Feb. 14, 2010, (July 4, 2008, 8:46 PM), http://advocacy.globalvoicesonline.org/2008/07/04/china- , W The second most publicized case concerning censorship in the PRC publicized case concerning censorship The second most (July 7, 2009, 4:41 AM), http://www.washingtonpost.com/wp-dyn/content/article/2009/ 44. 40. 41. 42. Dan Ritter, 43. 45. 46. Robin Wauters, 39. IMES OST T P 18, 2010, 8:30 AM), http://www.pcworld.com/article/203562/china_video_site_promotes_legiti mate_content.html. 2011), http://www.resonancechina.com/2011/01/05/baidu-and-google-lead-in-china-internet- market-share/. 19, 2011, 11:46 PM), http://news.bbc.co.uk/2/hi/8467491.stm. U.S.? .stuff.co.nz/technology/3499269/China-firm-boycotts-Google (“Companies, however, are lia- .stuff.co.nz/technology/3499269/China-firm-boycotts-Google with a company that has been condemned ble to think twice about maintaining a partnership rules.”). by Beijing for running afoul of its censorship .cnn.com/2009-03-25/tech/youtube.china_1_video-sharing-youtube-tibet-and-taiwan?_s=PM: TECH. nas-popular-video-platform-compete-with-youtube-in-the-u-s.html/ (“Google’s YouTube re- nas-popular-video-platform-compete-with-youtube-in-the-u-s.html/ mains blocked in China.”); 07/07/AR2009070701162.html. koo14-2010feb14. facebook-blocked-not-quite/. any mending of ties with the Chinese government, which he said has cut off access to any mending of ties with the Chinese government, in its power to arbitrarily restrict our access to Google’s Web services in the past. ‘China has market share they wish,’ Schmidt said.”). Chinese citizens to keep us at whatever percentage 864 a paltry 10.7%. at now stands market the PRC \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 8 10-OCT-13 10:02 remained completely unavailable in the PRC since 2009. in the PRC completely unavailable remained to the original Facebook via VPNs or proxies that have not yet been to the original Facebook via VPNs this Note, Google’s other businesses in the PRC have suffered as well, PRC have suffered businesses in the Google’s other this Note, software, phone operating Google’s mobile including at an incredible dis- that Google China has been put complicated history often don’t appear to its competitors for reasons that advantage compared intentions. to the PRC government’s stated to be logically related attempting to giant Facebook. In 2008, individuals involves social media problems, from the PRC began to experience access Facebook sive content, before censors remove it. sive content, before likely to be an effort on the part of the PRC government to prevent copy- on the part of the PRC government likely to be an effort YouTube’s major via streaming web-players because right infringement TuDou ( Chinese competitors, material, including U.S. videos amounts of illegal ness partners fled in fear of associating with a CCP-condemned com- a CCP-condemned of associating with fled in fear ness partners pany. 2009, the Xinjiang race riots led the PRC government to block access to 2009, the Xinjiang race riots led the Facebook in the PRC. 34040-mil_34-4 Sheet No. 99 Side B 10/10/2013 11:12:26 B 10/10/2013 99 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 100 Side A 10/10/2013 11:12:26 , , , 865 IMES IMES From 48 , N.Y. T , N.Y. T RAMEWORK (May 13, 2011, F 2 (Harv. Univ. Berk- UARDIAN 52 , G RACTICAL P , Feb.–Sept. 2005, http://www.nytimes , IMES cyber.law.harvard.edu/sites/cyber.law.harv EGAL AND As a result, Facebook lookalikes that lookalikes result, Facebook As a , N.Y. T 47 L HE available at : T While the PRC’s system of law has improved While the PRC’s system of law has Facebook: Can Mark Zuckerberg Crack the Chinese Mar- A Dual Track Approach Track A Dual 50 2010 Circumvention Tool Usage Report Freedom of speech and transmission of communi- Freedom of speech and transmission In Worker’s Death, View of China’s Harsh Justice China Cracks Down On VPN Use 51 Can Sina Weibo Enterprise Edition Kickstart Social eCommerce? Can Sina Weibo Enterprise Edition Kickstart NALYSIS Deep Flaws, and Little Justice, in China’s Court System see also Rule by Law A [Constitution], (2004) (China). (May 17, 2012, 11:46 AM), www.bbc.co.uk/news/business-18082900. 49 Sunny Ye, Jim Yardley, Puneet Pal Singh, ARKET EWS IANFA (June 17, 2011), http://techrice.com/2011/06/17/can-sina-weibo-enterprise-edition- See See See Hal Roberts et al., ), boastfully referring to itself as “the Facebook of China.” as “the Facebook referring to itself ), boastfully ICE See R After discussing the obstacles U.S. companies among the likes of After discussing the obstacles U.S. the overarching structure Like nearly all of its global contemporaries, As this background information makes clear, both Google and information makes clear, both As this background , BBC N 48. 52. 51. Joseph Kahn, 50. X 49. 47. Charles Arthur, ECH II. A M M K Dec. 31, 2005, at A1 (“Online discussion was censored and news media coverage was almost not completely banned”). The PRC’s judiciary also has a great deal of room to grow as it is Sept. 21, 2005, at A1; T man Ctr. for Internet & Soc’y, 2010), ard.edu/files/2010_Circumvention_Tool_Usage_Report.pdf. .com/ref/world/asia/rule_index.html (examining, through a nine-part series, the Chinese gov- ernment’s struggle in creating a modern legal system). 11:41 AM), http://www.guardian.co.uk/technology/2011/may/13/china-cracks-down-on-vpn- with access to Facebook through a VPN is very use. It is likely that the percentage of people small. ket? kickstart-social-ecommerce-graphic/. Summer 2013] PRC government. by the blocked \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 9 10-OCT-13 10:02 Google and Facebook have faced in the PRC, it is necessary to understand Google and Facebook have faced in does not derive its power. This Part where this official behavior does or law in the PRC to illustrate how they will examine the various sources of of legal rules prone to abuse with a have resulted in an inconsistent set series of discriminatory effects. of power in its constitution, the of the PRC government finds its source Constitution of the PRC. Facebook have faced enormous setbacks in market-share at the hands of enormous setbacks in market-share Facebook have faced economic and diplo- In the period of time that this the PRC government. are the most promi- to rage, Google and Facebook matic battle continues has affected U.S. how the PRC censorship regime nent examples of step is to explore turn, the U.S. economy. The next companies and, in situation and lay the and practices have resulted in this which Chinese laws policies. for a possible challenge to the PRC’s factual framework cation are two examples of underdeveloped areas. cation are two examples of underdeveloped by leaps and bounds, there are many areas where the rule of law is only by leaps and bounds, there are many beginning to develop. had originally popped up as unpopular alternatives have captured the mar- have captured unpopular alternatives popped up as had originally Renren main competitor, services, with the networking ket for social ( a one-time dominant position in the PRC market, Facebook’s market- market, Facebook’s in the PRC dominant position a one-time in the its operating profits negligible, as have PRC has become share in the jurisdiction. C Y 34040-mil_34-4 Sheet No. 100 Side A 10/10/2013 11:12:26 A 10/10/2013 100 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 100 Side B 10/10/2013 11:12:26 R M K K C Y 54 60 . W 34:857 NFO Unlike ENSORSHIP PERATIONS , I available at 55 [Vol. UPERPOWER -C O TATE OF THE S L ’ S ELF NT S HE , I The Legal System in , MERGING Article 35, which Article E 53 http://www.cecc.gov/pages/ 2012: T ONITOR ONTROL AND M Such a system is addition- C EPORT 59 R available at AAVY 3–4 (Org. Am. States, 2007), S http://files.amnesty.org/air12/air_2012_full HALLENGE OF AN C NFORMATION ORLD , I NTERNATIONAL available at HINA I C SARS 6 (2003), Chinese Internet Censorship Machine Revealed ROMISE AND P NON ’ MNESTY HE 107 (2012), , A : T Judicial Reform in China OMM L PREAD OF ’ Michigan Journal of International Law . C S NT HINA IGHTS I note 51. XEC C http://worldsavvy.org/monitor/index.php?option=com_content&view=arti art. 35 (2004) (China). R The PRC governments on the central, provincial, and city The PRC governments on the central, .-E 58 supra AND THE Antone Gonsalves, These provisions appear somewhat redundant as threats to national security These provisions appear somewhat redundant art. 40. MNESTY IANFA ODERN However, practice is often different from the law. However, practice UMAN ONG IN THE Id. See Cisco Accused of Helping Chinese Police Track Dissidents See Cisco Accused of Helping Chinese Police See Id. Id. M 56 H S ’ and their electronic communications are subject to warrantless in- communications are subject to and their electronic available at in PRC , 57 Under the Constitution of the PRC, all “citizens of the People’s Re- of the People’s “citizens PRC, all of the the Constitution Under A simple and straightforward reading of the Constitution of the PRC reading of the Constitution A simple and straightforward . (May 27, 2011), http://interopsgroup.com/cisco-accused-helping-chinese-police-track- 57. A 56. 59. 58. 54. 55. 60. C 53. X ORLD RP China are, under normal circumstances, also criminal matters. are, under normal circumstances, also criminal _en.pdf. G (Oct. 11, 2007, 3:52 PM), http://www.informationweek.com/news/202401567. legally independent from the CCP and it has only been about ten years since new judges legally independent from the CCP and it has were required to have a legal education. W (2008), W cle&id=113&Itemid=176; 866 what is section that includes is a further the PRC Constitution Unique to of the Constitution part of free speech. Article 40 traditionally considered correspondence of that “the freedom and privacy of of the PRC specifies by law.” Republic of China are protected citizens of the People’s \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 10 10-OCT-13 10:02 dissidents/ (“The complaint charges that Cisco ‘designed, supplied, and helped maintain a dissidents/ (“The complaint charges that Cisco ‘designed, supplied, and helped maintain censorship and surveillance network known as the Golden Shield in collaboration with Chi- that nese Community [sic] Party and Chinese Public Security officials, knowing and intending it would be utilized [by authorities] to eavesdrop, tap, and intercept communications, identify to and track Plaintiffs as Falun Gong members for the specific purpose of subjecting them gross human rights abuses.’”). terceptions. public of China enjoy freedom of speech, of the press, of assembly, of of the press, of assembly, of speech, China enjoy freedom public of and of demonstration.” of procession association, www.der.oas.org/Catedra/Reform%20in%20China.doc. Additionally, criminal defendants in www.der.oas.org/Catedra/Reform%20in%20China.doc. presumption of innocence as in the United the PRC do not appear to benefit from the same States. Kahn, levels, combined, have tens of thousands of employees to monitor Internet levels, combined, have tens of thousands content. activity, block websites, and remove might lead one to believe that freedom of speech is a near absolute right in believe that freedom of speech is a near might lead one to speech is often lim- PRC citizens’ right to free the PRC. Nevertheless, ited, ally effective in achieving its ends because its pervasiveness encourages ally effective in achieving its ends publishers to censor themselves. ordinary individuals, journalists, and grants these broad freedoms, is one of the few articles in the PRC Consti- articles in the PRC is one of the few broad freedoms, grants these to its provisions. exceptions or clarifications does not list any tution that Article 35, Article 40 allows this right to be limited under two narrow cir- 40 allows this right to be limited under Article 35, Article cumstances—first, is necessary to where disclosure of the correspondence relates to a criminal second, where the correspondence state security, and offense. 34040-mil_34-4 Sheet No. 100 Side B 10/10/2013 11:12:26 B 10/10/2013 100 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 101 Side A 10/10/2013 11:12:26 66 an ıng 867 anx´ ı gu ˇ ı zh ` anlˇ u de gu¯ Communism and http://www.asianlii aoh ` A complemen- ang gu ˇ http://www.chinalaw 64 anw ˇ an b ˇ ı li ´ oj` (Feb. 26, 2010, 10:32 AM), ), [Interim Provisions of the anqu ´ available at o gu ´ available at IMES ong ¯ ıt ˇ T Ruven Chu et al., anglu ` ı x` ı w ˇ ınx¯ IGITAL see also ınx¯ ) [Regulation of the People’s Republic of ı x` D ı x` anj¯ anj¯ HINA ısu ` The Temporary Regulations remain in The Temporary ısu ` oj` , C 62 oj` U., http://www-cs-faculty.stanford.edu/~eroberts/cs201/ egu ´ egu ´ A Dual Track Approach Track A Dual ongh ´ ongh ´ The regulation also allows the Ministry of Public The regulation also TANFORD ın g ` ın g ` 65 , S the PRC government has issued a series of regulations government has issued the PRC enm´ arts. 35, 40 (2004) (China). 61 enm´ a r ´ a r ´ IANFA art. 8. Any Internet user in the PRC, therefore, relies on government servers Publish and Be Deleted X onghu ´ onghu ´ The Temporary Regulations provide that all internet communi- provide that all internet The Temporary Regulations Id. art. 6. It also requires that all Internet Service Providers be licensed by the art. 17. 63 Id. Id. See Id. Although the Constitution of the PRC prohibits most forms of In- of most forms prohibits the PRC of Constitution the Although ıng ( 65. Zh ¯ 63. 64. 61. 66. 62. Zh ¯ ıd` M K ( gu¯ government. for access to the Internet. http://chinadigitaltimes.net/2010/02/global-times-publish-and-be-deleted/. People’s Republic of China Governing International Interconnection of Computer-based In- People’s Republic of China Governing International Council, May 20, 1997, effective May 20, 1997) formation Networks] (promulgated by the St. Regulations] (China), [hereinafter Computer Information edu.com/news/23223/23228/23205.htm. projects/communism-computing-china/privacy.html (last visited July 21, 2013) (“There is no projects/communism-computing-china/privacy.html eavesdropped and intercepted . . . all actions guaranteed privacy online in China; data is an individual. By reducing peoples [sic] privacy, taken online will always be directly linked to has also helped further censorship. People, people know they will be tracked online, China online and police themselves behaving as the for fear of breaking laws, will be more cautious people even more likely to self police is the government would desire them to. What makes [sic]. The ambiguity of law and the punish- lack of clear guidelines on what is and isn’t allow side of caution and stay away from dangerous ments make people more likely to err on the boundaries.”); China for Safety Protection of Computer Information Systems] arts. 6, 9, 19 (promulgated by China for Safety Protection of Computer Information Systems] arts. 6, 9, 19 (promulgated the St. Council, Feb. 18, 1994, effective Feb 18, 1994) (China), .org/cn/legis/cen/laws/rfspocis719/. Soon after, the Ministry of Public Security issued the regulations that are Soon after, the Ministry of Public Security levels of the PRC government as well-known today and cited by various system discourages the free flow of information news/prcControl_SARS.pdf (“The PRC legal by non-government-controlled institutions, but not only by erecting barriers to participation also by encouraging individual self-censorship.”); Summer 2013] \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 11 10-OCT-13 10:02 Computer Ethics: Privacy ternet censorship, or CTSNET, all through ChinaNet, GBNet, CERNET, cations must pass government-controlled server systems. of which are PRC granting itself the power to control communication on the Internet. The on the Internet. control communication itself the power to granting when the on Internet use PRC first issued rules branches of the legislative Con- 1997, the 42nd Standing of growth. In in its initial stages Internet was for the Regulations adopted the Temporary the State Council vention of Connec- Information Network International Management of Computer Regulations). tion (Temporary of the Internet. any criminal cases involving use Security to investigate full effect to the present day, fifteen years after they were initially present day, fifteen years after full effect to the adopted. tary regulation, the “Regulation of the People’s Republic of China for “Regulation of the People’s Republic tary regulation, the charges the Minis- of Computer Information Systems,” Safety Protection and guidance of In- with supervision, inspection, try of Public Security ternet development. C Y 34040-mil_34-4 Sheet No. 101 Side A 10/10/2013 11:12:26 A 10/10/2013 101 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 101 Side B 10/10/2013 11:12:26 R R R M K C Y 34:857 ECURITY 117, 231 In rela- S [Vol. 74 Petitions, Re- OMPLICITY IN FOR C prohibit any prohibit note 39. . Gudrun Wacker, 67 ABYRINTH NST See 69 supra I L , (Jan. 6, 2004), http://uk note 27. ORPORATE NION EGAL Jeffrey Hays, ORLD L supra . U S ”: C ’ , W UR NE see also , E HINA , O http://www.hrw.org/sites/default/files/ OTTOM , http://factsanddetails.com/china.php? note 62, art. 6. : C The loss in revenue due to the B 75 Additionally, some provinces and Additionally, some These terms have escaped any for- have escaped These terms supra ETAILS 70 68 ECRETS available at S & D ACE TO THE This practice can often result in the arbi- This practice can TATE 71 ACTS 72 , “R , S , F 18 (2006), HINA ATCH C W Michigan Journal of International Law ENSORSHIP 2003 Bad Year for Press Freedom IGHTS http://www.hrichina.org/sites/default/files/oldsite/PDFs/State-Secrets-Re- C IGHTS IN R at 3-6. See Baidu and Google Lead in Internet Market Share . R UMAN UM NTERNET See id. China Shuts Over 60,000 Porn Websites This Year See id. The level of censorship sophistication is so great in the PRC that sophistication is so great in the The level of censorship I available at 73 . (Oct. 5, 2012), http://www.iss.europa.eu/publications/detail/article/chinese-civil-society- Although the regulations have not been enforced consistently on a have not been enforced consistently Although the regulations The regulations described above have tremendously altered the land- altered the above have tremendously described The regulations 75. Calculated by estimating the market-share of Google China based on 420 million 71. H 69. 70. Computer Information Regulations, 74. 68. H 73. Jim Lobe, 72. 67. what Westerners might identify as The PRC central government benefits from HINESE TUD Internet users. (2007), port/HRIC_StateSecrets-Report.pdf. .oneworld.net/article/view/76161/1/1980. itemid=1647&catid=8&subcatid=50 (last updated Apr. 2012) (describing how many with itemid=1647&catid=8&subcatid=50 (last updated to the authorities in Beijing, because they grievances against the government file petitions they have grievances to provide them with “cannot expect the same local officials with whom justice.”). reports/china0806webwcover.pdf. C Chinese Civil Society at a Time of Leadership Change Chinese Civil Society at a Time of Leadership S of dissatisfaction in China—whichat-a-time-of-leadership-change/ (“[E]xpressions can some- issues with protesters blaming local authorities times turn violent are usually caused by local system. This local character explains why rather than China’s top leaders or the political in China.”); nation-wide protests have yet to materialise trievers and Black Jails in China “plausible deniability.” The PRC government has several layers of government and citizens “plausible deniability.” The PRC government the impression that the highest members of usually blame lower officials as they are under inferior officers’ bad acts. the PRC government are unaware of their 868 The access. Internet monitoring and in limiting actions for their support Security itself, of Public issued by the Ministry regulations, \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 12 10-OCT-13 10:02 city or provincial level, they have universally affected speech. The PRC level, they have universally affected city or provincial any country in the of jailed cyber-dissidents of has the largest number world. of thousands of websites. it has resulted in the blockage of tens scape of electronic communications in the PRC. Because all communica- communications in the PRC. Because scape of electronic that the PRC servers, there is no information tions go through government monitor or block. government cannot trary and inconsistent censorship of Internet websites, as some censors are censorship of Internet websites, trary and inconsistent others. more restrictive than mal definitions and can encompass almost any situation. almost any and can encompass mal definitions cities go even further in censoring and monitoring Internet communica- in censoring and monitoring Internet cities go even further jurisdiction. tions within their blockage is estimated to cost Google $600 million dollars per year in In- blockage is estimated to cost Google communications that defame or attempt to defame government agencies, defame government or attempt to that defame communications secrets. or leak state split the nation, tion to Google and Facebook, the recent censorship regime has cost tion to Google and Facebook, the Google China over 105.8 million users. 34040-mil_34-4 Sheet No. 101 Side B 10/10/2013 11:12:26 B 10/10/2013 101 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 102 Side A 10/10/2013 11:12:26 R R , , 79 US- See 869 IMES , B OLICY YOKU , http:// P , N.Y. T OREIGN 82 , F ARKETWATCH note 39. As Google and As Google 77 , M supra , , CRN (Mar. 4, 2010, 2:28 PM), http://www.nytimes.com/2006/04/23/magazine/ , http://www.marketwatch.com/investing/stock/ RENN Company Profile available at note 51. , http://www.marketwatch.com/investing/stock/YOKU/pro- Baidu Cleared in Copyright Infringement Case Brought by The Chinese Communist Party at 90: Relying on Repression A Dual Track Approach Track A Dual ARKETWATCH Google China’s Exposure: $600 Million in Sales This Year Google China’s Exposure: $600 Million in Sales The thefts of source code during various hacking various code during source thefts of The supra , 76 , M China’s expansion of economic espionage bails over China’s expansion of economic espionage bails (Jan. 26, 2010, 1:14 PM), http://arstechnica.com/tech-policy/2010/01/ Google’s China Problem (and China’s Google Problem) As a result, a PRC judge cannot necessarily be expected As a result, a PRC ARKETWATCH 81 Jacqui Cheng, . (June 21, 2011), http://www.usasialaw.org/?p=5570. , M Judges in the PRC are frequently Chinese Communist Party are frequently Chinese Communist Judges in the PRC See NST (Jan. 12, 2010, 9:50 PM), http://www.businessinsider.com/googles-china-expo- ECHNICA Jerome A. Cohen, Dan Frommer, 80 INESS See See Rule by Law See Share See Baidu and Google Lead in Internet Market L. I This is notable because they offer nearly identical services. they offer nearly notable because This is 78 SIA NSIDER RSA: Aurora Hackers Targeted Google Source Code RSA: Aurora Hackers Targeted Google Source I In addition to being a prominent body of adjudication on international a prominent body of adjudication In addition to being , ARS T Clive Thompson, 81. 80. 77. Josh Rogin, 79. nearly identical functions as their U.S. Baidu, RenRen, TuDou, and YouKu serve 82. It is notable that the PRC courts cleared a suit against Baidu by a Western record- 76. 78. M K U.S. A 23google.html?pagewanted=8&ei=5090&en=972002761056363f&ex=1303444800. Apr. 26, 2006, (Magazine), at 6, www.marketwatch.com/investing/stock/RENN/profile (last visited July 21, 2013); www.marketwatch.com/investing/stock/RENN/profile Company Profile BIDU/profile (last visited July 21, 2013); file (last visited July 21, 2013). The censorship mechanisms will be described further below. See sure-600-million-in-sales-this-year-lots-of-future-growth-2010-1. IFPI competitors and also have their content censored by the government in the same manner. competitors and also have their content censored BIDU Company Profile the ing industry organization but that the Music Copyright Society of China was successful on same grounds. (Jan. 14, 2010, 1:11 AM), http://thecable.foreignpolicy.com/posts/2010/01/13/china_s_expan Chinese government has adapted the tactics sion_of_economic_espionage_boils_over (“The corporate purposes and is now using them on a it has used for military cyber espionage for that Google, which has been operating in China wide scale . . . Some China experts contend government’s pattern of allowing in for- since 2004, may be simply fed up with the Chinese technology for the benefit of Chinese competi- eign companies and then appropriating their Chinese companies, surprisingly, have not tors, in this case the rival search engine Baidu.”). service in the hacking attempts. Stefanie Hoff- been negatively affected or suffered losses in man, http://www.crn.com/news/security/223101584/rsa-aurora-hackers-targeted-google-source- code.htm;jsessionid=faXYaQTlXMSYH8EKMB8bFg**.ecappj01. Summer 2013] alone. services ternet against for being companies appear to be discriminated Thus, U.S.-based the PRC market. foreign entrants in litigation within the to the WTO would also avoid trade issues, turning but still has some system may be developing quickly, PRC. The PRC legal way to go. \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 13 10-OCT-13 10:02 activists appointed to the bench, and many do not have a legal education to the bench, and many do not have activists appointed or background. nor to uphold the CCP-promulgated censorship policies to fairly evaluate a situation is that the PRC. The consequence of such a verdict against government pur- may be better off having the U.S. Google and Facebook of in the PRC courts. sue their claims in the WTO instead operations that were either sponsored by government or uncontrolled by or uncontrolled sponsored by government that were either operations Chinese companies. have also benefited government Facebook have continued to suffer from being censored or blocked, their censored or blocked, to suffer from being have continued Facebook and market share, revenue, massively in have gained PRC competitors profit. C Y 34040-mil_34-4 Sheet No. 102 Side A 10/10/2013 11:12:26 A 10/10/2013 102 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 102 Side B 10/10/2013 11:12:26 M K C Y N- O 34:857 AILY D [Vol. S ’ EOPLE , P ENSORSHIP Music Copyright Society Wins PRC C PRC RACTICES P ROHIBIT (Feb. 23, 2010), http://www.marbridgeconsult The four modes of supply are “cross- P 88 Additionally, the Commitment Schedule 89 Horizontal commitments apply to all sectors Horizontal commitments apply to ONSULTING ., http://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm 86 C Commitment Schedules break the treatment of Commitment Schedules break the OLICIES AND RG 87 P BLIGATIONS O The Commitment Schedule contains both horizontal The Commitment Schedule contains but they are also prohibited under several WTO obli- under several WTO are also prohibited but they Writers Win Copyright Lawsuit Against Baidu Michigan Journal of International Law 85 RADE ARBRIDGE 83 T , M arts. 35, 40 (2004) (China). art. XX. ORLD Cao Yin, GATS art. I. These promises are reflected in each member country’s Com- reflected in each member country’s These promises are IANFA LINE III.O GATS , W 84 The General Agreement on Trade in Services (GATS): Objectives, Coverage and The General Agreement on Trade in Services Id. Id. Id. See id. See Preliminary Steps to Examining the PRC’s Commitment Schedule to Examining the PRC’s Commitment Preliminary Steps see also (Sept. 19, 2012, 8:17 AM), http://english.peopledaily.com.cn/90882/7952883.html. Cross-border supply is defined to cover services that flow from the territory of one Member into the territory of another Member (e.g. banking or architectural ser- vices transmitted via telecommunications or mail); Consumption abroad refers to situations where a service consumer (e.g. tourist or patient) moves into another Member’s territory to obtain a service; Commercial presence implies that a service supplier of one Member establishes a territorial presence, including through own- ership or lease of premises, in another Member’s territory to provide a service (e.g. domestic subsidiaries of foreign insurance companies or hotel chains); and Pres- ence of natural persons consists of persons of one Member entering the territory of another Member to supply a service (e.g. accountants, doctors or teachers). The Annex on Movement of Natural Persons specifies, however, that Members remain Not only are the PRC’s censorship policies arguably illegal under the illegal under policies arguably are the PRC’s censorship Not only The signature feature of GATS is that it encourages, but does not re- of GATS is that it encourages, The signature feature 86. 85. 87. 88. 89. 84. 83. X A. Disciplines ing.com/marbridgedaily/2010-02-23/article/33753/music_copyright_society_wins_suit_against_ baidu; (last visited July 21, 2013). baidu-cleared-in-copyright-infringement-case-brought-by-ifpi/; Suit Against Baidu 870 \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 14 10-OCT-13 10:02 mitment Schedule. PRC constitution, services into four modes of supply. and specific commitments. gations, including GATS. This Part will analyze PRC censorship policies PRC censorship This Part will analyze GATS. gations, including The different legal principles. law through two lens of GATS through the schedule and examine the PRC’s GATS commitment first application will of PRC censor- relevant categories, the present state show that under all of GATS’ with these promises. Second, an application ship is inconsistent the current PRC (MFN) principle similarly renders Most Favored Nation relating to censorship illegal. regulatory scheme how they will treat to make commitments as to quire, member countries services. of trade, while specific commitments apply only to sectors explicitly listed of trade, while specific commitments by the member country. border supply,” “consumption abroad,” “commercial presence,” and border supply,” “consumption abroad,” “presence of a natural person.” 34040-mil_34-4 Sheet No. 102 Side B 10/10/2013 11:12:26 B 10/10/2013 102 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 103 Side A 10/10/2013 11:12:26 95 871 Nev- 92 ., http://www HINA AND THE RG PRC Concession O 93 RADE T ., RS20139, C ORLD ERV , S/L/92 (Mar. 28, 2001) (“Since S , W Report of the Working Party on the 96 ESEARCH . R Guidelines for the Scheduling of Specific Commit- ONG , C In fact, section 2, subsection c, Telecommunica- In fact, section 2, 1 (2001). A Dual Track Approach Track A Dual 94 ORRISON Countries are strongly encouraged not to go back on not to go are strongly encouraged Countries M. M 91 , WT/ACC/CHN/49/Add.2 (Oct. 1, 2001) [hereinafter RGANIZATION AYNE O W GATS art. XXI. The purpose of the Commitment Schedule is for countries to is for countries Schedule of the Commitment The purpose See See Id. See Services: Rules for Growth and Investment RADE ]. 90 T free to operate measures regarding citizenship, residence or access to the employ- free to operate measures regarding citizenship, ment market on a permanent basis. The first step in applying GATS to the controversy at hand is deter- GATS to the controversy The first step in applying 93. Council for Trade in Services, 94. 92. 95. Working Party on the Accession of China, 96. U.N. Statistics Division, U.N. Statistical Commission, Central Product Classifica- 90. 91. ORLD M K ments Under the General Agreement on Trade in Services ments Under the General Agreement on Trade schedules, including footnotes, headnotes and attachments, are a record of legal commit- schedules, including footnotes, headnotes and ments, nothing should appear in them which a Member does not intend to be legally binding.”). .wto.org/english/thewto_e/whatis_e/tif_e/agrm6_e.htm (last visited July 21, 2013) (“These .wto.org/english/thewto_e/whatis_e/tif_e/agrm6_e.htm bound tariffs for trade in goods, they can only clearly defined commitments are ‘bound’: like countries. Because ‘unbinding’ is difficult, the be modified after negotiations with affected for foreign exporters and importers of ser- commitments are virtually guaranteed conditions vices and investors in the sector to do business.”). Schedule Accession of China tion, CPC Version 1.1, ESA/STAT/SER.M/77/Ver.1.1 (Feb. 21, 2002), unstats.un.org/unsd/ statcom/doc02/cpc.pdf [hereinafter Central Product Classification]. W Id. The PRC chose to add these services to their Commitment Schedule even The PRC chose to add these services which is the complete list of though the Central Product Classification, the WTO, did not include those product classifications utilized within items at the time of the PRC’s accession. Summer 2013] treat- “national and access” on “market the limitations both provides ment.” \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 15 10-OCT-13 10:02 mining whether GATS actually applies. That is to say, is Internet commu- actually applies. That is to say, mining whether GATS the GATS and its a service within the meaning of nication considered when the In- Schedule? GATS came into existence related Commitment but by the time the form of communication, ternet was still a burgeoning impact were the WTO, the Internet and its potential PRC ascended to world. known across the slowly build upon their previous commitments, thereby ratcheting open thereby ratcheting commitments, upon their previous slowly build their economies. their commitments, but they are legally allowed to withdraw them. are legally allowed but they their commitments, tion Services of the PRC’s Concession Schedule, explicitly includes “elec- tion Services of the PRC’s Concession and database retrieval,” “electronic tronic mail,” “on-line information and/or data processing.” data interchange,” and “on-line information ertheless, it is rare for a country to remove its commitments and such abdi- commitments and to remove its it is rare for a country ertheless, removed. The effect once the commitment is officially cation will only take are made le- specified in the Commitment Schedules levels of treatment reliance on Com- Articles XVI and XVIII. As such, gally binding through in proceedings is a “justified practice.” mitment Schedules C Y 34040-mil_34-4 Sheet No. 103 Side A 10/10/2013 11:12:26 A 10/10/2013 103 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 103 Side B 10/10/2013 11:12:26 M K C Y 99 , ¶ 34:857 U.S.— ]. [Vol. In 97 ). Additionally, the 101 ). U.S.—Gambling ( China—Audiovisual Products China—Measures Affecting Trad- Measures Affecting the Cross-Border Sup- Antigua and Barbuda argued that and Barbuda argued Antigua China—Measures Affecting Trading Rights 98 This principle is well accepted among This principle is Interim Report to the General Council: Work Pro- 100 China—Audiovisual ( United States— , S/C/8 (Mar. 31, 1999) (“Members agreed that GATS ap- , ¶ 1.1—1.3, Panel WT/DS285/R (Nov. 10, 2004) [hereinafter United States—Measures Cross-Border Affecting the United States—Measures of Gam- Affecting the Cross-Border Supply Michigan Journal of International Law As such, the evidence suggests that both the PRC and substan- As such, the evidence suggests that ¶ 6.285 (“Therefore, a market access commitment for mode 1 implies the right ¶ 6.285 (“Therefore, a market access commitment ¶ 3.161; Appellate Body Report, , Antigua and Barbuda brought a case against the United States a case against and Barbuda brought , Antigua Id. Id. Id. 102 The second step in a GATS analysis ordinarily involves examining The second step in a GATS analysis Further confirmation that GATS covers services delivered via the In- via the delivered services covers GATS that confirmation Further 99. 97. Appellate Body Report, 98. Panel Report, 100. 101. 102. Council for Trade in Services, Gambling for other Members’ suppliers to supply a service through all means of delivery, whether by for other Members’ suppliers to supply a service specified in a Member’s Schedule. We note mail, telephone, Internet etc., unless otherwise neutrality’, which seems to be largely that this is in line with the principle of ‘technological shared among WTO Members.”). and Distribution Services for Certain Publications and Audiovisual Entertainment Products 398, WT/DS363/AB/R (Dec. 21, 2009) [hereinafter gramme on Electronic Commerce plied to all services regardless of the means of technology by which they were delivered. This for was further reinforced by the fact that in no area of the WTO were there different rules different techniques of delivery. It was noted that the principle of technological neutrality also applied to scheduled commitments, unless the schedule specified otherwise: it was there- fore possible for Members to schedule commitments in a non-technologically neutral manner.”). bling and Betting Services Report]. ply of Gambling and Betting Services, WT/DS285/AB/R (Apr. 7, 2005) [hereinafter Appel- ply of Gambling and Betting Services, WT/DS285/AB/R late Body Report]. 872 States had vio- Appellate Body found that the United Both the Panel and gambling and bet- because its commitment to leaving lated its obligations This is known as also applied to online gambling. ting services unrestricted subject to a mem- neutrality” principle, meaning that, the “technological can be transmitted to the contrary, services ber country’s commitments of delivery. through any means \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 16 10-OCT-13 10:02 tive WTO law intended GATS to apply to Internet services. tive WTO law intended GATS to apply In electronic communication which mode of supply has been utilized. the information has been accessed by there is some debate about whether ternet can be found from various WTO resources, including the Appellate including the WTO resources, be found from various ternet can in Body’s decision Services Gambling and Betting Supply of the United States’ Commitment Schedule specified that there would be no Commitment Schedule specified that the United States’ and betting services cross-border supply of gambling restrictions on the such commitment. States argued that it had made no while the United WTO members and was also upheld in WTO members and and Audiovi- Services for Certain Publications ing Rights and Distribution sual Entertainment Product Council on Trade in Services, the WTO committee charged with examin- Council on Trade in Services, the WTO has plainly stated that GATS ing GATS in light of current developments, citing unanimity in WTO member covers electronically delivered services, opinion. for its restrictions on online gambling. on online for its restrictions 34040-mil_34-4 Sheet No. 103 Side B 10/10/2013 11:12:26 B 10/10/2013 103 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 104 Side A 10/10/2013 11:12:26 R R R R R R 873 suggests that In- suggests note 97. supra . 131, 136 (2005) (“As is the case all measures of general application EV R The distinction is important be- The distinction is U.S.—Gambling on condition that they do not discriminate 105 RADE , art. VI (“In sectors where specific commit- T id. permitted ORLD Although this will not always be the case, the this will not always Although Appellate Body Report, , 4 W A Dual Track Approach Track A Dual 104 note 98, ¶ 3.29. The Appellate Body did not overrule this note 98, ¶ 3.29. The Appellate Body did (unless they are explicitly listed in the Member’s schedule). In See 108 Rien ne Va Plus? Distinguishing Domestic Regulations from Mar- supra are administered in a reasonable, objective and impartial manner.”) are administered in a reasonable, objective and The Panel report in The Panel note 12, art. XVI; note 12, art. XVI. Article VI, in turn, specifies that members must ensure Article VI, in turn, specifies that members prohibited 103 107 Application of the PRC’s Commitment Schedule Application of the PRC’s Commitment supra supra note 86. While Google did own a subsidiary in China to provide these note 86. While Google did own a subsidiary note 19. B. art. VI. The General Agreement on Trade in Services (GATS): Objectives, Coverage and The General Agreement on Trade in Services supra Article XVI of the GATS, which covers market access, provides GATS, which covers market access, Article XVI of the , Id. supra 106 Although it may appear that deciding which category a measure falls Although it may appear that deciding Thirdly, a critical step in any legal analysis of whether a member has step in any legal analysis of whether Thirdly, a critical Lau, 106. Joost Pauwelyn, 108. 107. GATS, 104. Panel Report, 105. GATS, 103. supply and mode 2 is consump- As addressed previously, mode 1 is cross-border M K ments are undertaken, each Member shall ensure that ments are undertaken, each Member shall affecting trade in services (emphasis added). ket Access in GATT and GATS under GATT, the distinction thus made by GATS between market access and domestic regu- lation has vital legal consequences. Like quantitative restrictions under Article XI of GATT, the market access restrictions specified in Article XVI of GATS are, for committed services sectors, in principle, contrast, like domestic regulations under Article III of GATT, domestic regulations affecting the supply of services are, in principle, foreign as against domestic services or service suppliers.”) (citations omitted). portion of the Panel Report. tion abroad. Disciplines operations are now located outside of the PRC. services previously, all of its relevant physical See Summer 2013] is important This of the country. outside country or of the inside a citizen concession accorded by a level of treatment it may affect the because mode 2 mode 1 and treatment between if it specifies different schedule supply. forms of \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 17 10-OCT-13 10:02 that no member may treat services less favorably than its Commitment that no member may treat services Schedule states. analysis will almost inevitably be into is a question of law, any complicated described above and case law, how- intensely fact-specific. Both the details policies are a limitation on market ever, quickly illustrate that the PRC’s that rules affecting services are administered in a “reasonable, objective that rules affecting services are administered and impartial manner.” ternet service consumption from a foreign source will ordinarily be classi- will ordinarily from a foreign source consumption ternet service 1 of supply. fied as mode classification has little impact in this instance as the application of both little impact in this instance as the classification has regime, as discussed weigh against the PRC’s censorship modes’ provisions below. the complained commitments is determining whether upheld their GATS on market as a domestic regulation or a limitation of behavior qualifies to all services within are measures that apply access. Domestic regulations solely to services limitations on market access apply the country, while from abroad. flowing into the country cause domestic regulations are ordinarily subject to less scrutiny at the are ordinarily subject to cause domestic regulations WTO. C Y 34040-mil_34-4 Sheet No. 104 Side A 10/10/2013 11:12:26 A 10/10/2013 104 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 104 Side B 10/10/2013 11:12:26 R R R R R R R R R M K C Y ang- (Oct. note note supra 34:857 ITIZEN ı w ˇ EB C ınx¯ supra supra W [Vol. ı x` UBLIC , the United Dispute Settle- EXT anj¯ , P N ısu ` Dispute Settlement: HE , T note 65; J` Appellate Body Report, supra see U.S.—Gambling The PRC government also re- government also The PRC In This illustrates that, in practice, This illustrates that, 109 note 46. 114 note 97, ¶¶ 11617, for an example demon- 113 This is even though providers of This is even though a Regulation of the People’s Republic of China 112 supra ) [Computer Information Network and Internet supra anf ˇ see ı b ` Nevertheless, U.S. providers of online ser- Nevertheless, U.S. anlˇ 111 note 65; Computer Information Regulations, note 65; Computer Information Regulations, note 65; Computer Information Regulations, note 65; Computer Information Regulations, Antigua and Barbuda challenged that delivery Antigua and Barbuda challenged that u gu ˇ note 98, at para. 7.2(a); ., http://www.wto.org/English/tratop_e/dispu_e/cases_e/ds285_e Case Summary: WTO Internet Gambling Case 115 aoh ` supra supra , RG supra note 19; Wauters, note 19; The Great Firewall: China’s Digital Margins O an b ˇ Michigan Journal of International Law see also supra anqu ´ RADE art. 35 (2004) (China); T ang ¯ Josh Ong, Lau, Regulation of the People’s Republic of China for Safety Protection of Com- Regulation of the People’s Republic of China Regulation of the People’s Republic of China for Safety Protection of Com- Regulation of the People’s Republic of China ]. IANFA ORLD anw ˇ See See See See These regulations are difficult to avoid as Google and Facebook are difficult to avoid as Google and These regulations ı li ´ , W oj` 110 Treating the blockage of Google and Facebook as a market access lim- Treating the blockage of Google and 113. 114. But see Appellate Body Report, 115. Panel Report, 112. 110. 111. 109. X o gu ´ ( (Mar. 2007), http://www.citizen.org/documents/gamblingsummary2007.pdf; ment: United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services 14, 2012, 12:14 PM), http://thenextweb.com/asia/2012/10/14/the-great-firewall-chinas-digital- outside of China, such as search, Twitter, margins/ (“Services that we take for granted by Chinese equivalents (namely, Baidu, Sina Facebook and YouTube have all been replaced Weibo, Renren and Youku Tudou).”). in a strating that not all policies that may affect a service-provider’s ability to provide services country should be treated as market access limitations. note 97, at ¶¶ 21213; 109. puter Information Systems, 109. lu ` .htm (last visited July 21, 2013) (summarizing the case) [hereinafter United States Security, Protection and Management Regulations] (promulgated by the Ministry of Public Security, Protection and Management Regulations] Information Regulations]. Security, Dec. 30, 1997) [hereinafter Computer puter Information Systems, for Safety Protection of Computer Information Systems, for Safety Protection of Computer Information 874 most at their the PRC, policies of and laws domestic The relevant access. although of rules stating that, set out a relatively straightforward basic, lay monitor government may the constitution, the in tension with seemingly electronic communications. and intercept \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 18 10-OCT-13 10:02 must route their traffic via government servers if they hope to provide any via government servers if they must route their traffic at all. services to PRC users vices, including Google and Facebook, continue to have their access to the and Facebook, continue to have vices, including Google shuttered. PRC market completely a series of U.S. laws, the blocking of of gambling services were impeded by nearly identical online services like Baidu, RenRen, and YouKu continue services like Baidu, RenRen, and nearly identical online the Chinese market. to enjoy access to States had specified a certain level of treatment for gambling services in its States had specified a certain level of Commitment Schedule. the PRC censorship regime has closed access to mainland China by several regime has closed access to mainland the PRC censorship engaged in online services. Western companies itation is also ground in WTO case law. quires that all electronic communications be routed through state-con- routed through communications be all electronic quires that are easily regulations these two domestic Combined, trolled servers. information and all has blocked access to certain satisfied: the government Internet connec- upon government servers for their PRC users are reliant tion. 34040-mil_34-4 Sheet No. 104 Side B 10/10/2013 11:12:26 B 10/10/2013 104 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 105 Side A 10/10/2013 11:12:26 R R R R R R 875 supra U.S.—Gam- Interpreting the 123 The PRC has made The case noted that case noted The 120 116 In comparison, the PRC In comparison, Appellate Body Report, see 118 In terms of national treatment, 122 note 97, ¶¶ 36164. note 95, at 17. supra The panel and appellate body treated the and appellate The panel supra , As such, the comparison with As such, the comparison 117 119 A Dual Track Approach Track A Dual note 98, ¶¶ 1.12.1. note 98 at ¶¶ 6.263, 6.421; 124 note 113 (“‘The Chinese government blocked every single interna- supra supra supra In this category, the PRC has made commitments both in In this category, the PRC has made 121 Appellate Body Report, Ong, at 17. at Annex 1.1. Id. Id. PRC Concession Schedule Id. See See indicates that a WTO panel would treat the PRC regime as a market panel would treat the PRC regime indicates that a WTO Whether this means that there are no limitations on mode 1 unless the Whether this means that there are no Moving toward the heart of the matter, the PRC has made three sets heart of the matter, the PRC has Moving toward the 124. 123. 120. The PRC government made commitments regarding advertising services, which 121. 122. 116.117. Panel Report, 118. Panel Report, 119. M K tional Web 2.0 Internet service, and we Chinese copycat every one,’ he said, describing the tional Web 2.0 Internet service, and we Chinese copycat every one,’ he said, describing country’s strategy as a simple ‘block and clone’ tactic.”). serve as a source of revenue for both Google and Facebook. This advertising service is impos- sible without having their sites accessible in mainland China. Rather, this category would only become relevant if their websites were actually to become accessible. Summer 2013] actions. other government and websites, several \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 19 10-OCT-13 10:02 note 97, ¶ 265. foreign service supplier chooses to locate operations in the PRC or foreign service supplier chooses to must have operations in the PRC is whether foreign service suppliers may not ultimately be conclusive, two somewhat debatable. Although they market access and national treatment. U.S. measures as restrictions on market access. as restrictions U.S. measures bling access limitation. at hand, two of that are relevant to the situation of GATS commitments directly to the censorship matter. which are related the PRC has indicated that there are no limitations. the PRC has indicated that there domestic providers of the same services could operate nearly unencum- operate nearly same services could providers of the domestic the United States. bered in Value-added both “Telecommunications Services commitments regarding telecommu- and Related Services.” Value-added Services” and “Computer information and include e-mail, voice-mail, online nications services interchange, enhanced facsimile ser- database retrieval, electronic data and online information and/or data vices, code and protocol conversion, processing. has enacted a regime to block websites it disapproves of without any con- of without websites it disapproves a regime to block has enacted actions and effects of the PRC-government’s grounding. The stitutional sites such are similar, as Google and social networking unofficial policies to the market while to be blocked from any access as Facebook continue are not. their competitors market access limitations is more difficult as Mode 2 is subject to no limi- market access limitations is more difficult same limitations as Mode 3 in market tations, but Mode 1 is subject to the suppliers will be permitted to establish access limitations: “Foreign service enterprises, without quanti- joint venture value-added telecommunication . . . foreign investment shall be no tative restrictions, and provide services more than 50 per cent.” C Y 34040-mil_34-4 Sheet No. 105 Side A 10/10/2013 11:12:26 A 10/10/2013 105 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 105 Side B 10/10/2013 11:12:26 R R R R M K C Y note 34:857 supra ENSORSHIP [Vol. -C ELF Disregarding S 130 a 126 e f ˇ Additionally, coun- Additionally, In fact, the method ıy ` http://www.cecc.gov/pages/ 125 128 ., http://www.wto.org/english/ ONTROL AND ıng qˇ RG C note 109; Regulation of the Peo- O ıngy´ Thus, the PRC government’s , WT/DS285/AB/R, ¶ 21465 (Apr. 7, ı j¯ United States—Measures Affecting the available at ez¯ 129 supra RADE T ai h ´ NFORMATION ORLD , I ongw ` , W o zh ¯ HINA ) [Law of the People’s Republic of China on Chinese- C This is supported by the fact that the PRC This is supported egu ´ SARS 6 (2003), 127 note 79. NON ’ ongh ´ note conscious of individual 12, art. XIX (The WTO remains Appellate Body Report, ın g ` supra OMM PREAD OF see also Top 10 Reasons to Oppose the World Trade Organization? see also Top 10 Reasons to Oppose the World Michigan Journal of International Law . C S supra enm´ a r ´ XEC see also ; .-E AND THE Computer Information Regulations, Thompson, GATS, onghu ´ ONG IN THE See See See See id. PRC Ultimately, however, both methods of interpretation will lead to simi- both methods of interpretation Ultimately, however, The same conclusion is also reached if the PRC’s policies are inter- The same conclusion is also reached 128. C 127. 130. Zh ¯ 129. 126. 125. ( 109. thewto_e/minist_e/min99_e/english/misinf_e/09sov_e.htm (last visited July 21, 2013). thewto_e/minist_e/min99_e/english/misinf_e/09sov_e.htm ple’s Republic of China for Safety Protection of Computer Information Systems, Foreign Joint Ventures] art. 1 (promulgated by the Fifth Nat’l People’s Cong., effective July 1, Foreign Joint Ventures] art. 1 (promulgated by the Fifth Nat’l People’s Cong., effective July news/prcControl_SARS.pdf. member’s sovereignty); Criticism, yes . . . misinformation, no! 2005). Cross-Border Supply of Gambling and Betting Services Cross-Border Supply of Gambling and Betting 876 on the Based interpretation. the former in favor of heavily weigh factors limitations to remove all PRC had intended appears that if the context, it of limi- the explanation except for investment, service suppliers on foreign . . .” with “none, except have started tations would \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 20 10-OCT-13 10:02 lar results. If it means no limitations, then the PRC government has failed no limitations, then the PRC government lar results. If it means in a sector because it has imposed restrictions to fulfill its commitments above, the PRC has to impose none. As described where it has committed mainland China al- Google, YouTube, and Facebook in blocked access to in the same fashion competitors continue to operate though its immediate laws or regulations would. There are no explicit as their U.S. counterparts so it cannot to censor information themselves, that require the companies have failed to up- U.S. telecommunication providers be the case that the hold any legal obligation. government has been credited as having the most advanced Internet con- credited as having the most advanced government has been and censors all of the information trols of any government in the world expect private corporations to censor itself so it is even more irrational to government’s. at a level any higher than the PRC actions appear to be inconsistent with its Telecommunications Services actions appear to be inconsistent in its Commitment Schedule. Value-added Services obligations contained to enter into joint ventures before preted as requiring foreign providers services in mainland China. The PRC they can offer telecommunications Owned Enterprises (WFOEs) government requires most Wholly-Foreign with a local company, often related to establish some sort of joint venture any sort of business. to the local government, to engage in whereby search engine providers in the PRC determine which sites should whereby search engine providers in every known Internet address be blocked is by systematically accessing and seeing which ones are not retrievable. tries should only be held to the narrow commitments they have made due they have the narrow commitments only be held to tries should schedules. the commitment nature of to the voluntary 34040-mil_34-4 Sheet No. 105 Side B 10/10/2013 11:12:26 B 10/10/2013 105 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 106 Side A 10/10/2013 11:12:26 R R R R . 1 132 877 ACTS EG As (Mar. R , F U.S.— 133 IMES OMMERCIAL RADE note 19. . T C IN Nor has the Nor has , F supra note 40. 131 HINESE , NCCR T supra The Interaction Between , C , OOS R AARTEN In its Commitment Schedule, the Quite simply, this requires that the 134 note 95. 135 supra Foreign Companies and Foreign Investment in China Foreign Companies and Foreign Investment in A Dual Track Approach Track A Dual note 46. Speculation grows on Google’s future in China 131 (2010) (“Chinese law continues to restrict foreign investors 131 (2010) (“Chinese law continues to restrict supra UIDE G http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1088758. http://www.china.org.cn/business/laws_regulations/2007-06/22/content_121 , (last visited July 21, 2013) http://factsanddetails.com/china.php?itemid=349 Wauters, Kathrin Hille, , the result of analyzing the measures as limitations on national the measures as limitations on , the result of analyzing AND See Google Postpones China Mobiles After Censorship Row See RACTICAL available at ETAILS available at Facebook, however, is a different story. At the time of this analysis, story. At however, is a different Facebook, Even though a WTO panel and appellate body would likely interpret panel and appellate body would Even though a WTO : A P D 132. 133. 134. Indeed, many scholars have argued that Article XVI and Article XVII greatly 135. PRC Concession Schedule, 131. AW M K Gambling (2006), 19, 2010, 12:30 PM), http://www.ft.com/intl/cms/s/0/fa374b78-3350-11df-bc32-00144feabdc0 .html#axzz2KvxohA1Z (“The company operates google.cn, its China-registered website, under a joint venture with a domestic partner because Chinese law bars foreign investors from holding controlling stakes in the Internet content business.”); Lau, overlap under current WTO jurisprudence. Panagiotis Delimatsis, GATS Articles VI, XVI, XVII and XVIII after the U.S. Gambling Case from operating wholly foreign-owned subsidiaries. In these industries, the only way for for- from operating wholly foreign-owned subsidiaries. a joint venture with a local counterpart. Typical eign investors to legally participate is through to Chinese-foreign joint ventures, as deter- examples of industries that remain open only are car manufacturing, life-insurance, finance, mined in the Foreign Investment Catalogue, certain mining activities.”). securities, printing telecommunications, and (“Foreign companies doing business in China are generally required to form joint ventures (“Foreign companies doing business in China wholly owned subsidiaries.”). There is evidence with Chinese companies instead of forming about foreign companies forming joint that the PRC government has become less adamant enter the PRC market. Nevertheless, in indus- ventures with domestic partners in order to it would be beneficial for a PRC partner to tries that are considered “sensitive” or where continues to require any foreign entrants acquire industrial knowledge, the PRC government M to form a joint venture with a domestic partner. 1979), 4773.htm (China). Jeffrey Hays, L Summer 2013] this with is compliant Google is clear that it such a system, of the merits in the PRC. and presence through its legal status standard most of its business is a reminder of this lesson as Google’s own story ceased coop- telecommunication industry suddenly partners in the mobile Google. PRC government began to target eration after the \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 21 10-OCT-13 10:02 PRC government treat foreign companies, including Google and PRC government treat foreign companies. As detailed above, Facebook, just like it would treat domestic PRC has committed itself to imposing no limitations to the national treat- PRC has committed itself to imposing ment of foreign service suppliers. PRC government claimed that Google has violated this condition. that Google has violated claimed PRC government but this is in the PRC, physical presence has no sort of legal Facebook is it to create one. Facebook impossible for it would be largely because unjustified risk to and it would be an enormous and banned in the PRC venture partner. backlash against a possible joint create a government Facebook cannot be expected to fulfill this obligation due to the PRC- be expected to fulfill this obligation Facebook cannot Facebook measures to prevent Facebook’s compliance, government’s own from meeting this legal requirement. should be excused they did in as a market access limitation as the PRC’s regulations treatment would be much the same. C Y 34040-mil_34-4 Sheet No. 106 Side A 10/10/2013 11:12:26 A 10/10/2013 106 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 106 Side B 10/10/2013 11:12:26 R R R R M K C Y 34:857 note 65; [Vol. reasonable, supra Additionally, if it is the 141 note 109. No additional laws are regula- supra , note 109. 136 .” 142 supra , note 79. supra Michigan Journal of International Law note 12, art. IV (emphasis added). supra art. VI. No significant regulations or procedures concerning foreign service art. VI. No significant regulations or procedures Thompson, Additionally, the process of self-censorship appears flawed and Additionally, the process of self-censorship Instead, Google and Facebook are expected to uphold a series of Facebook are expected to uphold Instead, Google and Computer Information Regulations See id. Id. See See id. Instead, “self-censorship” was initiated by a series of search en- Instead, “self-censorship” was initiated This is the only method whereby Google and Facebook could dis- This is the only method whereby Google 138 137 139 140 Additionally, the PRC appears to be in violation of Article VI’s main of Article VI’s to be in violation the PRC appears Additionally, Nevertheless, the facts suggest that the PRC’s treatment has not been facts suggest that the PRC’s treatment Nevertheless, the 138. 141. 142. The PRC government does have the right to limit access to certain types of infor- 139. 140. 136.137. GATS, mation, as discussed later, but cannot limit foreign service providers as a whole without justi- fication. Additionally, if they have made specific commitments as to particular services they will allow foreign service providers to make available in the PRC, then those services must also be allowed electronically. Computer Information Regulations tions are to be found through the PRC government’s online recourses or elsewhere. providers have been passed complying with GATS Article IV. Regulation of the People’s providers have been passed complying with Computer Information Systems, Republic of China for Safety Protection of 878 by against discriminated to be continue Facebook and Google however, political with domestic and of competitors government in favor the PRC China. roots in mainland where specific commitments 1: “In sectors found in Section obligations, of general that all measures shall ensure each Member are undertaken, in a trade in services are administered application affecting manner objective and impartial \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 22 10-OCT-13 10:02 rules that not only appear unconstitutional, but that are also implemented appear unconstitutional, but that are rules that not only it has been sug- and subjective manner. While in an extremely arbitrary with the U.S. for the PRC’s strained relationship gested that the reason “self-censorship,” no because they have not engaged in service providers is requires or details these de- set of official regulations either explicitly mands. laid out any standards for determining subjective because the PRC has not be banned from transmission into the which pieces of information should PRC. their own accord through a process of gine and social media providers on websites and discovering which were systematically attempting to access in neighboring and Western coun- unavailable in the PRC but available tries. in the PRC. cover which sites should be blocked reasonable, objective, and impartial. The PRC is required to detail the and impartial. The PRC is required reasonable, objective, are expected to that foreign service providers procedures and regulations to do so has been country, but no serious effort comply with in the made. PRC’s responsibility to determine which websites pose a threat to the state PRC’s responsibility to determine which over all PRC servers, it is unreasona- and they alone have ultimate control as a whole rather than the specific in- ble to censor the service providers references to, as detailed below in formation the PRC has the right to limit the discussion of Article XIV. 34040-mil_34-4 Sheet No. 106 Side B 10/10/2013 11:12:26 B 10/10/2013 106 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 107 Side A 10/10/2013 11:12:26 R R R R R 147 151 879 Unlike the Unlike Google and As defined by As defined 143 145 144 Although the com- 148 recognized the electronic delivery note 96, at 247. note 96, at 247. , http://www.google.com/about/corporate/com note 97, ¶ 180. note 95, at 10. note 95. supra supra , http://www.facebook.com/help/?page=408 (last vis- OOGLE supra supra supra , G A Dual Track Approach Track A Dual ACEBOOK Additionally, while some of these standards refer Additionally, while some of these standards 150 U.S.—Gambling , F 149 Google also allows customers to create documents and e- customers to create documents Google also allows 146 Appellate Body Report, at 10. Id. News Feed Basics See See Technology Overview Id. Having established that several of Google and Facebook’s services Having established that several of The second commitment schedule category in which the PRC has PRC which the in category schedule second commitment The 147. 148. 149. 150.151. Central Product Classification, PRC Concession Schedule, 146. 144. 145. Central Product Classification, 143. PRC Concession Schedule, M K pany/tech.html (last visited July 21, 2013). ited July 21, 2013). The PRC appears to be in violation of these obligations as it has prevented The PRC appears to be in violation their services in mainland China in Google and Facebook from providing Facebook similarly allows its customers to upload information and data to allows its customers to upload information Facebook similarly information and others, processing it into accessible share with countless a “news feed.” prioritizing friends’ information in Summer 2013] \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 23 10-OCT-13 10:02 qualify as computer and related services, the PRC’s commitments regard- qualify as computer and related services, The results are much more straight- ing these categories can be evaluated. telecommunications services category forward than under the value-added no limitations on both market access as the PRC has committed to impose of computer and related services. and national treatment in the area made commitments is “Computer and Related Services.” and Related is “Computer made commitments mails online to store on Google’s servers for access anywhere. store on Google’s servers for mails online to to tapes and diskette, they clearly leave room for future technological up- to tapes and diskette, they clearly leave and recognizing the importance of grades by specifying “or other medium” electronic data storage. puter and related services described above are reminiscent of a time where puter and related services described the use of physical data storage units, data storage and processing required modern systems from quali- this does not prevent Google and Facebook’s commitment schedule. The Appel- fying for protection under the PRC’s late Body’s decision in category, based on the “technological of a service falls into that service’s neutrality” principle. the CPC, data processing services include: “processing of data supplied by of data include: “processing data processing services the CPC, of specific without any design etc., tabulation, computation, the customer, on tape, diskette, of data (supplied by the customer) software,” “capture and “provision directly into a data processing system,” or other medium or services not elsewhere classified.” of data processing users, or “custom- a variety of different services to their Facebook provide example, Google that fall into these categories. For ers” in this situation, search function- of all its users in order to improve stores the user history results based on and prioritizes an individual’s search ality for everyone this history. value-added telecommunication services category, here the PRC directly here the PRC services category, telecommunication value-added service.” “data processing the CPC in including refers to C Y 34040-mil_34-4 Sheet No. 107 Side A 10/10/2013 11:12:26 A 10/10/2013 107 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 107 Side B 10/10/2013 11:12:26 R R R R M K , C Y RADE 34:857 T As with REE [Vol. . F 157 UR , E The majority of ., http://www.wto.org/eng 159 RG O The GATS does allow for Thus, the PRC likely has not Thus, the PRC likely RADE 158 T FTAs and the WTO 154 , http://www.google.com/about/company/his- ORLD note 46. note 46. , W OOGLE supra supra The MFN provision was intended to pre- The MFN provision was intended , G 155 note 46. Blocking Google China’s search functionality stopped functionality search China’s Google Blocking Michigan Journal of International Law note 12, art. II. 152 note 19; Wauters, note 19; note 19; Wauters, note 19; supra supra Application of the Most Favored Nation Principle Application of the Our History in Depth supra supra The MFN principle is codified at Article II of GATS and is The MFN principle is codified at Free trade areas and customs unions grant more favorable treatment to partici- C. 156 Id. Id. See Basic Purpose and Concepts Fourth Amended and Restated Certificate of Incorporation of Google Inc. Similarly, Facebook has been denied any access to the PRC access to the been denied any Facebook has Similarly, , http://investor.google.com/corporate/certificate-of-incorporation.html (last visited , http://www.efta.int/free-trade/fta-and-wto.aspx (last visited July 21, 2013). 153 The MFN requirement of the GATS may be overlooked in arguments The MFN requirement of the GATS Now that the PRC’s obligations regarding its commitment schedule obligations regarding its commitment Now that the PRC’s N ’ 154.155. Wauters, 156. GATS, 157. 158. 153. Lau, 159. 152. Lau, SS OOGLE pating countries than their current WTO obligations. lish/tratop_e/serv_e/cbt_course_e/c1s6p1_e.htm (last visited July 21, 2013). tory/ (last visited July 21, 2013). July 21, 2013); A 880 any form. almost \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 24 10-OCT-13 10:02 G regularly referred to as one of the cornerstones of the WTO. regularly referred to as one of the market, making it impossible for it to gather, index, prioritize, and share impossible for it to gather, index, market, making it its potential customers. the information of it from acquiring information from its mainland Chinese users, and the Chinese users, from its mainland information it from acquiring that the services indicate and document blocking of GMail intermittent those ser- allow providers of its promise to has broken PRC government competi- as domestic under similar conditions into the country vices access tors. vent member countries from discriminating between foreign-based ser- vent member countries from discriminating to allow the importation of those vices if the member had already opted services. several exceptions to its articles, but the discussion below will highlight several exceptions to its articles, but is quite limited. that their impact on the MFN principle have an incredibly positive impact regarding PRC censorship, but it could file a case on behalf of Google and for the United States if it were to in California in September of 1998 Facebook. Google was incorporated October 2002. and reincorporated in Delaware in upheld its specific promises embodied in its Commitment Schedule in the promises embodied in its Commitment upheld its specific Facebook. case of Google and provision can an analysis of another critical GATS have been identified, the GATS, which in member countries are parties to take place. All WTO above, includes a voluntary commitments described addition to the mandatory provision, MFN. Google’s operations continue to take place in the United States, and it is Google’s operations continue to take the various other WTO commitments, the WTO does allow member coun- the various other WTO commitments, an important exception to most tries to participate in free trade areas, GATS. WTO commitments, including the 34040-mil_34-4 Sheet No. 107 Side B 10/10/2013 11:12:26 B 10/10/2013 107 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 108 Side A 10/10/2013 11:12:26 R R R R R AS- AIL 161 881 , I say , N & M note 79; 165 Guanxi LOBE supra , , G Youku Tudou Out- note 2. You Say These titles are actu- supra , , http://www.nasdaq.com/sym , http://www.nasdaq.com/sym 163 ASDAQ ASDAQ , N , N note 159. (Sept. 26, 2012, 9:32 PM), http://www Frederik Balfour, RENN Company Profile Google’s primary “Chinese” com- “Chinese” primary Google’s supra AILY , Therefore, in order to determine the 160 see also D (Nov. 19, 2007), http://www.businessweek.com/ 166 note 79; HINA Youku Tudou Inc. Stock Quote & Summary Data supra , C , A Dual Track Approach Track A Dual note 79. China’s Internet Giants may be Stuck There Facebook’s situation is similar to Google’s as its Facebook’s situation USINESSWEEK note 12, arts. II & IV. 164 B supra , supra the PRC should be required to rely on legal registration. the PRC should be required to rely 167 LOOMBERG GATS, David Barboza, , B DAQ See Understanding the WTO: A Unique Contribution See See BIDU Company Profile Baidu, Inc. Stock Quote & Summary Data See generally Our History in Depth Renren, Inc. Stock Quote & Summary Data Both Baidu’s and Youku’s headquarters are located in the People’s headquarters are and Youku’s Both Baidu’s The fact that all of Google’s and Facebook’s PRC-market competitors Google’s and Facebook’s PRC-market The fact that all of 162 , http://www.nasdaq.com/symbol/yoku (last visited July 21, 2013). 162. 163. 166. 167. 164. 161.represent a majority, it has partnered Although Youku’s market-share does not 165. 160. M K .chinadaily.com.cn./bizchina/2012-09/26/content_15783661.htm. magazine/content/07_47/b4059066.htm. bol/renn (last visited July 21, 2013). bol/bidu (last visited July 21, 2013); YOKU Company Profile with its only viable competitor, Tudou, to provide content. Chen Limin, with its only viable competitor, Tudou, to provide lines Vision for Merged Company Schmoozing (Aug. 23, 2012, 1:32 PM), http://m.theglobeandmail.com/technology/chinas-internet-giants- (“‘Ifmay-be-stuck-there/article1374338/?service=mobile the Chinese government continues that reach critical mass could become phe- to favor domestic companies, those companies founder of Qiming Ventures, a U.S. venture nomenally profitable . . . ‘ said Gary Rieschel, it may be hard for those companies to become capital firm with investments in China. ‘But world class without outside competition.’”); Summer 2013] titan. a U.S. to as referred regularly and favorit- support extensive government Youku benefit from Baidu and ism. \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 25 10-OCT-13 10:02 are registered abroad raises a novel issue. If these “Chinese” companies raises a novel issue. If these “Chinese” are registered abroad abroad, are the in the PRC but are incorporated have their headquarters consistency within triggered? In order to maintain GATS’ MFN principles to this question must be in the affirma- the WTO and PRC law, the answer settlement mechanisms be gov- tive. The WTO mandates that its dispute erned by law rather than politics. Republic of China’s capital city, Beijing, and are respectively referred to are respectively city, Beijing, and of China’s capital Republic and “Chinese YouTube.” as the “Chinese Google” When foreign companies attempt to do business in the PRC, they face a When foreign companies attempt to they must fulfill, including a require- host of regulatory requirements that only “Chinese” competitor is not as Chinese as one might assume. Renren is not as Chinese as one might only “Chinese” competitor as the “Chinese Facebook’s designs and refer to itself may appropriate entity. is also a Cayman Islands-incorporated Facebook,” but it nationality of an entity, its legal status and registration must be the deci- nationality of an entity, its legal status is expected to maintain uniform and sive factor. Additionally, if a country objective laws, petitors are Baidu and Youku, the former being the dominant provider of the dominant the former being Baidu and Youku, petitors are services. video streaming the latter providing services and search engine ally misnomers, however, as neither Baidu nor Youku are PRC-incorpo- as neither Baidu nor Youku ally misnomers, however, Cayman Island- Both Baidu and Youku are officially rated companies. incorporated entities. C Y 34040-mil_34-4 Sheet No. 108 Side A 10/10/2013 11:12:26 A 10/10/2013 108 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 108 Side B 10/10/2013 11:12:26 R R R R R R M K C Y ACTS supra 34:857 (Mar. , F As the SIA [Vol. OMMERCIAL A 168 C IRE note 79. W HINESE supra ECH , http://www.lehmanlaw U , C , T OOS & X R EE Thompson, , L AARTEN see also EHMAN , L Similar to Google’s story, Facebook’s main Similar to Google’s story, Facebook’s dissident material, or copyright-infringing dissident material, 175 Foreign Companies and Foreign Investment in China Foreign Companies and Foreign Investment (July 25, 2012), http://www.whatsondalian.com/news-4627- Baidu, however, continues to enjoy full access to Baidu, however, continues 172 131 (2010) (“Chinese law continues to restrict foreign investors 131 (2010) (“Chinese law continues to restrict 171 169 note 19. note 24 (“Baidu rapped for spreading [Edison Chen] photos”). Youku and Tudou have also hosted anti-government Youku and Tudou have also hosted ALIAN Michigan Journal of International Law note 12, art. II. UIDE note 26 (discussing the Music Copyright Society of China’s complaint, Much Ado About Video: Youku Buys Tudou 174 D N G supra supra supra supra O S ’ , (last visited July 21, 2013) http://factsanddetails.com/china.php?itemid=349 Tan, Lau, HAT China’s Online Video Website Youku in Hot Water for Distributing Child Porn See See See Offshore Jurisdiction Information RACTICAL Google’s YouTube remains completely unavailable in the PRC, remains completely unavailable Google’s YouTube As detailed above, the PRC government has forced the complete the PRC government has forced As detailed above, ETAILS , W 173 170 Assuming that a panel or appellate body would label Baidu, Tudou, label Baidu, appellate body would that a panel or Assuming : A P D 175. 172. 173. Chen, 174. Nick Puno, 171. 170. GATS, 169. 168.on Chinese-Foreign Joint Ventures, Law of the People’s Republic of China AW 12, 2012), http://www.techwireasia.com/2311/much-ado-about-video-youku-buys-tudou/. Videos which alleged that Baidu “‘stealthily provide[s] unlicensed music streaming and downloading via its Web site, and thus earn[s] significant advertising revenues via its massive online traffic brought about by its music download service.’”); .com/resource-centre/faqs/restructuring/corporate-services-practice/offshore-jurisdiction-in formation.html (last visited July 21, 2013). china-s-online-video-website-youku-in-hot-water-for-distributing-child-porn-videos.html; from operating wholly foreign-owned subsidiaries. In these industries, the only way for for- from operating wholly foreign-owned subsidiaries. a joint venture with a local counterpart. Typical eign investors to legally participate is through to Chinese-foreign joint ventures, as deter- examples of industries that remain open only are car manufacturing, life-insurance, finance, mined in the Foreign Investment Catalogue, certain mining activities.”). securities, printing telecommunications, and (“Foreign companies doing business in China are generally required to form joint ventures (“Foreign companies doing business in China wholly owned subsidiaries.”). There is evidence with Chinese companies instead of forming about foreign companies forming joint that the PRC government has become less adamant enter the PRC market. Nevertheless, in indus- ventures with domestic partners in order to it would be beneficial for a PRC partner to tries that are considered “sensitive” or where continues to require any foreign entrants acquire industrial knowledge, the PRC government M to form a joint venture with a domestic partner. L AND 882 industries. in most local entities with joint ventures to form ment note 130, art. 1. Jeffrey Hays, \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 26 10-OCT-13 10:02 closure of Google China, regularly blocks Google.com, and has intermit- China, regularly blocks Google.com, closure of Google tently blocked GMail. though the latter remain completely accessible even but Youku and Tudou their uploaders have videos that neither they nor is well known for hosting a copyright over. and Renren as foreign entities relative to the PRC, the United States the PRC, the United relative to as foreign entities and Renren to uphold its MFN on a claim that the PRC has failed could easily succeed the PRC to treat requirement of the GATS requires obligations. The MFN that has not been the importers in the same manner, but all foreign service case. the PRC market even though its practices are no better than Google’s in though its practices are no better the PRC market even censoring pornography, and pornographic videos. data. PRC relies upon the registration status of a corporation to judge whether a to judge status of a corporation upon the registration PRC relies on it in this required to rely it should be is a foreign entity, corporation as well. circumstance 34040-mil_34-4 Sheet No. 108 Side B 10/10/2013 11:12:26 B 10/10/2013 108 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 109 Side A 10/10/2013 11:12:26 R R R R R 176 883 , Apr. IMES The most Chinese Cen- (July 13, 2012), 177 , N.Y. T IMES T , Jack Phillips, POCH ., http://www.wto.org/english/ RG , E 5 Reasons Why Renren Will Never O see also RADE T ORLD Google, Baidu, Youku, Facebook, and Google, Baidu, Youku, 9, http://www.signature9.com/electrotech/5-reasons- , W 5 Reasons Why Renren Will Never be a Facebook 179 note 113. A Dual Track Approach Track A Dual IGNATURE supra , S 180 note 113; note 113 (“‘The Chinese government blocked every single interna- note 12, art. XIV. Ong, The PRC government has often claimed the public The PRC government has often http://www.nytimes.com/2006/04/23/magazine/23google.html?pagewant supra supra 181 supra Google’s China Problem (and China’s Google Problem) Google’s China Problem (and China’s Google note 176. 178 Defenses to the Most Favored Nation Clause: Step One Defenses to the Most Ong, Ong, supra , See Id. See generally See Regional Trade Agreements available at D. The exceptions allow a WTO member country to skirt its GATS re- The exceptions allow a WTO member Without explicit justification, the PRC government has blocked justification, the PRC government Without explicit If the United States brought this case, the PRC would have an oppor- If the United States brought this case, be construed to prevent the Nothing in this Agreement shall of Measures: (a) neces- adoption or enforcement by any Member public order; The pub- sary to protect public morals or to maintain only where a genuine and lic order exception may be invoked to one of the fundamental in- sufficiently serious threat is posed terests of society. 176. 180.181. GATS, 179. 177. 178. M K tional Web 2.0 Internet service, and we Chinese copycat every one,’ he said, describing the tional Web 2.0 Internet service, and we Chinese country’s strategy as a simple ‘block and clone’ tactic.”); be a Facebook Equivalent 26, 2006, http://m.theepochtimes.com/n2/china-news/chinese-censors-announce-tighter-controls-on-on line-video-content-264012.html. ed=8&ei=5090&en=972002761056363f&ex=1303444800; tratop_e/region_e/region_e.htm (last visited July 21, 2013). sors Announce Tighter Controls on Online Video Content sors Announce Tighter Controls on Online why-renren-will-never-be-a-facebook-equivalent (last visited July 21, 2013). Equivalent Clive Thompson, Summer 2013] of Facebook. a copy purposes and for all intents is Renren, competitor, “newsfeed,” including the are nearly identical, and functions Their designs perusing regularly with the PRC government other functions, “wall,” and inappropriate. what it deems and blocking users’ information \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 27 10-OCT-13 10:02 quirement in order to protect public morality or prevent threats to na- quirement in order to protect public tional security. Google and Facebook while their similarly situated competitors continue while their similarly situated competitors Google and Facebook free reign. to enjoy relatively morals and public security exceptions in the face of international criticism morals and public security exceptions Renren are all foreign corporations under WTO principles and PRC law, corporations under WTO principles Renren are all foreign situation at hand. should logically apply to the so the MFN requirement foreign competitors PRC has chosen not to treat these Nevertheless, the MFN principle con- likely in violation of the similarly and is, therefore, tained in GATS. tunity to defend its practices. Article XIV of the GATS states: tunity to defend its practices. Article common defense against compliance with the MFN requirements is a free MFN requirements with the defense against compliance common such a do not have and Cayman Islands but the PRC trade area, relationship. C Y 34040-mil_34-4 Sheet No. 109 Side A 10/10/2013 11:12:26 A 10/10/2013 109 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 109 Side B 10/10/2013 11:12:26 R R R R M K C Y 34:857 That In ex- (Mar. 26, 183 185 [Vol. TATE OF THE S HE HIMBUN China-Audiovi- S 184 SAHI 2011: T , A 189 EPORT R note 109. supra The public morality and security The public 182 note 101, ¶¶ 25054. NTERNATIONAL supra note 97, ¶ 292. I , supra MNESTY , A L ’ China Bans Reporting on 18 Subjects note 12, art. XIV. n.5. Such a test looks at the relative importance of the Such a test looks 104 (2011). NT I Michigan Journal of International Law 186 supra IGHTS ¶¶ 30911. R MNESTY A GATS, Computer Information Regulations, ¶ 305. Bodies to deal with issues of this ¶ 306. According to the recent Appellate ¶ 307. ¶ 309. It’s important to note that the burden is not to prove that are no reason- See id. Before diving into the tests a WTO panel would apply, it is Before diving into the tests a WTO UMAN Ultimately, these factors indicate whether there are any factors indicate whether there Ultimately, these Additionally, scholars and Western politicians regularly claim Additionally, scholars and Western See Id. Id. Id. Id. China—Audiovisual Products See See 191 H As with any affirmative defense, the burden of proof rests with the As with any affirmative defense, the S 187 ’ 190 188 The PRC government espouses several reasons in support of its cen- The PRC government espouses several In order to determine whether a country may benefit from the protec- whether a country may benefit In order to determine opinion affirmed the WTO’s commitment to these principles. commitment to affirmed the WTO’s opinion ORLD 191. 185.186. Appellate Body Report, 187. 188. 189. 190. Kenji Minemura, 183. 184. 182. 2010), http://www.asahi.com/english/TKY201003250329.html. nature, this list of factors is not exhaustive but no further factors have yet been enumerated. Id. ably available alternatives, but to show that it engaged in a diligent search for less restrictive alternatives. W 884 it is that will illustrate below the analysis but scheme, its censorship over a defense. succeed on such unlikely to \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 28 10-OCT-13 10:02 that the entire regime is intended to protect the CCP from negative infor- that the entire regime is intended to mation. relatively easy to discard the argument that PRC censorship is necessary relatively easy to discard the argument Protecting the CCP from un- to protect the CCP from negative coverage. to one of Article XIV’s narrow excep- flattering information is not related state may employ measures to tions, which provide that a member reasonable WTO-consistent alternatives available to the challenged mea- alternatives available to reasonable WTO-consistent sure. protections. party seeking to invoke Article XIV’s statement that the PRC’s censorship is sorship regime. Beyond the general two specific justifications that are meant to protect public morality, the to inhibit the flow of pornography most often mentioned are the desires that might incite ethnic ten- and to halt the flow of “false” information sions. tions of Article XIV, the WTO determines whether the measures taken the WTO determines whether tions of Article XIV, objective. necessary to achieve an acceptable are related to and interest furthered by the challenged measure, the contribution of the mea- by the challenged measure, the contribution interest furthered international com- of the interest, and the impact on sure to the realization merce. exceptions to the GATS should not be understated, as the not be understated, to the GATS should exceptions sual said, however, any panel or appellate body is likely to take an extremely is likely to take an appellate body any panel or said, however, Article XIV The footnote to Article XIV. to interpreting narrow approach invoke the Article, limit the ability for member states to explicitly seeks to applicability to this situation is unclear. and the Article’s conduct a weighing measure is necessary, WTO panels amining whether a and balancing test. 34040-mil_34-4 Sheet No. 109 Side B 10/10/2013 11:12:26 B 10/10/2013 109 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 110 Side A 10/10/2013 11:12:26 R R R , , 197 885 supra , public It would be It would See Top 10 Rea- 193 . Although it is a Assuming that the 199 198 political order Press Brief— Fiftieth Anniversary of the Multi- Although it is less clear if halting the Although it is less ., http://www.wto.org/english/thewto_e/minist_e/ 196 RG , it is unlikely that a WTO panel would , it is unlikely that note 97, ¶ 292. O supra RADE Internet Censorship Liable to WTO Challenge— Study A Dual Track Approach Track A Dual Importantly, it does not state that a member that a not state it does Importantly, T 192 Main Building Blocks: Agreement, Annexes, and Schedules Main Building Blocks: Agreement, Annexes, note 12, art. XIV. ¶¶ 254–330. ORLD As member countries are entitled to protect the As member countries ., http://www.wto.org/english/tratop_e/serv_e/cbt_course_e/c2s6p1_e political order , W supra RG 195 art. 35–40 (2004) (China). O Jonathan Lynn, GATS, IANFA RADE See generally id. See See See id. Even the PRC’s constitution reflects this distinction perfectly, as perfectly, reflects this distinction PRC’s constitution Even the (Nov. 4, 2009, 5:49 PM), http://in.mobile.reuters.com/article/businessNews/ T but not the 194 Preventing the dissemination of pornography could certainly be an ap- of pornography could certainly Preventing the dissemination The PRC is unlikely to fare as well when it comes to the “necessary” The PRC is unlikely to fare as well ORLD 197. The WTO remains conscious of individual member’s sovereignty. 195. X 198.199. Appellate Body Report, 196. 192. 193. 194. largely by developed countries Certainly the founding of the WTO was lead EUTERS M K .htm (last visited July 21, 2013) (“As noted before, the Agreement clearly distinguishes be- .htm (last visited July 21, 2013) (“As noted tween, on the one hand, trade liberalization under specific commitments and, on the other to- hand, domestic regulation for quality and other legitimate policy purposes. By the same ken, there is no need to schedule access restrictions, such as sales bans on arms or porno- or graphic material and the like, that fall under the General Exceptions of Article XIV prudential measures aimed to ensure the stability and integrity of the financial services sector.”). sons to Oppose the World Trade Organization? Criticism, yes . . . misinformation, no! note 126. min96_e/chrono.htm (last visited July 21, 2013). R idINIndia-43677220091104; marked by democratic systems of governance. marked by democratic systems of governance. lateral Trading System As described above, the first test that the contested measures must meet is the first test that the contested measures As described above, to the pursuit of a specific goal. that they be related Summer 2013] order. public maintain \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 29 10-OCT-13 10:02 W allow the PRC to adopt measures on the basis of protecting a political adopt measures on the basis of protecting allow the PRC to party. Article XIV. propriate goal under it explicitly allows the government censorship authority to protect the authority to censorship allows the government it explicitly protect a political fails to grant the same power to state’s interests but party’s interests. order country may employ measures to protect the to protect the employ measures country may spread of information that could lead to ethnic tensions is acceptable, a that could lead to ethnic tensions spread of information such a basis. defer to the member country invoking WTO panel could censorship regime is intended to prevent the spread of pornography and censorship regime is intended to prevent is easy to meet. violence-inciting information, this test crude tool, blocking Google, YouTube, and Facebook certainly removes crude tool, blocking Google, YouTube, can access pornography and share three of the many ways that individuals a WTO panel may agree that the violence-inciting communications. Thus, to its goals of halting pornography and PRC’s censorship regime is related tensions. information that may result in ethnic and balancing analysis, the importance test, however. Under this weighing untenable to argue that WTO signers had intended to allow member states to allow member signers had intended to argue that WTO untenable ruling or a specific political hierarchy to protect a specific the power class. C Y 34040-mil_34-4 Sheet No. 110 Side A 10/10/2013 11:12:26 A 10/10/2013 110 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 110 Side B 10/10/2013 11:12:26 R R R R R R R R R R M K C Y ATE EWS supra 34:857 ! N Ethnic , SFG [Vol. 205 AHOO Preventing , Y 201 The measures note 27; Tan, note 27; note 27. 206 In this, the PRC’s , 112th Cong. 15 (2011) supra supra 209 , , Halting the spread of Halting 200 note 175. China’s Online Video Website Youku 208 supra note 115. , and the most direct competitors to and the most direct In this instance, the impact on the In this instance, note 24; 204 supra 207 , supra note 97, ¶ 307. A WTO panel would have to undergo a A WTO panel would have to undergo case, the ultimate effect on trade was only case, the ultimate 211 supra China’s Great Firewall Impedes Foreign Trade Tens of thousands of pornographic websites Tens of thousands 203 note 79; Tan, note 79; note 196. Anti-Japan Protests in China Swell, Turn Violent note 113. Michigan Journal of International Law supra note 203. supra supra , Peter Scheer, U.S.—Gambling supra Didi Tang, Lynn, Ong, Many have accused the PRC of blocking these U.S. titans sim- Many have accused the PRC of blocking ¶¶ 254–306. See China Shuts Over 60,000 Porn Websites This Year See China Shuts Over 60,000 Porn Websites See See, e.g. See See Id. This Year See China Shuts Over 60,000 Porn Websites Dispute Settlement: United States Media: The Human Toll and Trade China’s Censorship of the Internet and Social 210 and ethnic strife. The ultimate purpose of the weighing and balancing test is to examine of the weighing and balancing test The ultimate purpose As for the second prong, it is hard to show that blocking Google and prong, it is hard to show that blocking As for the second 202 202. 203. 211. 201. 210. 209. Appellate Body Report, 200. 204. 205. Thompson, 206.207. Tang, 208. Impact Before the Congressional-Executive Commission on China (statement of Gilbert B. Kaplan, President, Committee to Support U.S. Trade Laws). (Jan. 24, 2010, 4:00 AM), http://www.sfgate.com/opinion/article/China-s-Great-Firewall-im- pedes-foreign-trade-3202538.php (“The United States can argue that China’s ‘Great Fire- wall’—a of filters and bottlenecks that effectively shutters the country within its own system intranet—is an illegal restraint on international trade because it bars foreign companies from competing, via the Internet, in the vast Chinese market.”). (Sept. 15, 2012), http://news.yahoo.com/anti-japan-protests-china-swell-turn-violent- 044101740.html. 886 and the it, to achieving measure of the the contribution end goal, of the are examined. international commerce impact on \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 30 10-OCT-13 10:02 note 24. in Hot Water for Distributing Child Porn Videos ply to aid their competitors. whether there are any reasonably available alternatives to the contested whether there are any reasonably available impact on trade. measure that have a less detrimental lengthy analysis of the available evidence in this matter. The evidence is lengthy analysis of the available evidence to the alternative measures that the more straightforward when it comes remained accessible within the PRC remained accessible U.S. economy is likely to be in the billions. U.S. economy is likely Google and Facebook in the PRC appear to have facilitated it. in the PRC appear to have facilitated Google and Facebook measures are likely to fail for several reasons. First, it’s clear that the rea- measures are likely to fail for several Google and Facebook may be just a sons the PRC has given for blocking pretext. pornography is likely to be considered an important goal. considered an important is likely to be pornography ethnic strife is also an important desire, but the fact that it may involve the fact that it may desire, but is also an important ethnic strife against it certainly weighs truthful information communication of silencing to some degree. against pornogra- any meaningful impact on the battle Facebook has had phy to an incredible the flow of international commerce have also dammed degree. In the estimated to be about $21 million. estimated to be about tensions remain extremely dangerous within the PRC. tensions remain extremely 34040-mil_34-4 Sheet No. 110 Side B 10/10/2013 11:12:26 B 10/10/2013 110 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 111 Side A 10/10/2013 11:12:26 R R R R , 887 Bra- ( U.S.—Gam- 214 Quite simply, the chapeau 215 note 97. The chapeau clause of Article XX of note 97. supra supra Brazil—Measures Affecting Imports of Retreated Tyres A Dual Track Approach Track A Dual Brazil—Measures Affecting Imports of Retreated Tyres note 79. supra As detailed previously, the only way Internet compa- only way Internet previously, the As detailed note 12, art. XIV. Therefore, there is no need to censor Google and Therefore, there 212 note 97, ¶ 291. 213 supra supra Defenses to the Most Favored Nation Clause: Step Two Defenses to the Most Appellate Body Report, Appellate Body Report, Thompson, See id. See See See ). Appellate Body Report, E. case, and it serves as a powerful tool in preventing member countries case, and it serves as a powerful tool 216 The chapeau clause received quite some attention in the The chapeau clause received quite would step into this situation and As it is intended to do, the chapeau In the final analysis of whether the PRC may claim an exception to its In the final analysis of whether the PRC 213. 214.215. GATS, 216. 212. M K zil—Tyres the GATT was also analyzed in bling from abusing the Article XIV exceptions. ¶¶ 27–43, (Dec. 3, 2007). Although there are differences in the texts of the WT/DS332/AB/R provisions, Article XX and Article XIV are treated similarly by WTO panels. Appellate Body Report, Summer 2013] at blocking so adept has proven PRC government upon. The can rely PRC information or certain simply block references by itself that it can material those ser- than blocking or Facebook rather on Google from appearing whole. vices as a \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 31 10-OCT-13 10:02 likely invalidate the PRC’s practices if it had succeeded thus far in defend- likely invalidate the PRC’s practices First, the evidence suggests that the ing its practices under Article XIV. use the Article XIV exceptions as pre- PRC government has attempted to Internet titans while allowing Baidu text to discriminate against America’s Facebook themselves. Removing the restrictions on access to Google and Removing the restrictions on access Facebook themselves. and vio- access to the same number of pornographic Facebook would limit U.S. compa- as is currently the case while allowing lence-inciting websites alternative has the PRC. The fact that such an obvious nies to operate in likely did not also illustrates that the PRC government not been utilized a WTO panel is for reasonable alternatives. Therefore, engage in a search as unnecessary to censorship of Google and Facebook likely to view the and order. uphold public morals likely be unsuccessful in defending GATS requirements, the PRC would finds its source in the very first section its practices. The GATS’ “chapeau” that such measures are not of Article XIV: “Subject to the requirement a means of arbitrary or unjus- applied in a manner which would constitute where like conditions prevail, or tifiable discrimination between countries . . . .” a disguised restriction on trade in services nies in the PRC actually know what material should be blocked is by should be blocked know what material PRC actually nies in the and what makes it through and seeing to access it themselves attempting what does not. applies when a member country has used the exceptions as a pretext to applies when a member country has countries, and when more reasonable unjustifiably discriminate between available in achieving the claimed or less trade distorting alternatives were goal. C Y 34040-mil_34-4 Sheet No. 111 Side A 10/10/2013 11:12:26 A 10/10/2013 111 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 111 Side B 10/10/2013 11:12:26 R R R M K C Y 34:857 As the [Vol. EGIME 219 A U.S. ar- note 211. R 222 supra note 27. ., http://www.wto.org/ RG supra Second, rather than O , Scheer, ENSORSHIP 224 . (Nov. 1, 2010, 3:10 AM), http:// RADE AG T see also Baidu and Youku are, in fact, are, and Youku Baidu PRC C 217 ORLD , W As such, there is no need to cause a there is no need As such, , ABA J. M TO THE 220 School Linked to Operation Aurora is Tied Indirectly note 79. (Feb. 19, 2010), http://www.infosecurity-magazine.com/ TRIPS supra Among its most important features, it sets mini- Among its most important features, ]. Breaking China 221 First, the PRC government itself has been involved in First, the PRC government itself has Michigan Journal of International Law NFOSECURITY 223 ,I , Thompson, PPLICATION OF Operation Aurora Id. See id. See Overview: the TRIPS Agreement See China Shuts Over 60,000 Porn Websites This Year See China Shuts Over 60,000 Porn Websites See, e.g. Most telling, however, is the fact that the PRC possesses tools and possesses tools fact that the PRC however, is the Most telling, Although this topic remains largely unexplored in the current contro- Although this topic remains largely IV. A 218 222. 223. Facebook might also be able to make an argument that it is not receiving national 224. Lanxiang Vocational School, a government-run military school has now been 218. 219. 220. 221. 217. Steven Seidenberg, www.abajournal.com/magazine/article/breaking_china/; english/tratop_e/trips_e/intel2_e.htm (last visited July 21, 2013). english/tratop_e/trips_e/intel2_e.htm (last visited treatment as its intellectual property is being used by Renren, but Facebook would likely have to make a case in the PRC courts first to make an argument in front of the WTO. Additionally, such an argument would likely follow the reasoning laid out above. traced as the source for a variety of hacking events, including those discovered by State Department officials in February 2010. to Hacktivist Group view/7486/school-linked-to-operation-aurora-attack-is-tied-indirectly-to-hacktivist-group/ [hereinafter 888 market. the PRC reign in free and Youku \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 32 10-OCT-13 10:02 versy, TRIPS could serve as a powerful tool for the U.S. government in versy, TRIPS could serve as a powerful Google and Facebook. TRIPS applies challenging the PRC’s censorship of to all WTO members. alternatives that would not distort billions of dollars in trade. distort billions that would not alternatives the theft of Google’s intellectual property rights. the theft of Google’s intellectual property mum standards for the protection of intellectual property among member mum standards for the protection of country have venues whereby intellec- countries and mandates that every infringing parties. tual property rights holders can challenge trade distortion by censoring Google, YouTube, and Facebook. Further- censoring Google, YouTube, and trade distortion by due to its immoral country wishes to block material more, if a member country would to society, logically, the member nature or other threat country. In contrast, material coming in from any other block that type of one country on the claims to block material from if the member country of the same objectionable but allows the importation grounds that it is been objectionable country, the material has not material from another public order. a threat to public morals or enough to be considered no less effective at blocking the material the PRC government wishes it PRC government the material the at blocking no less effective to. create a system whereby intellectual property rights are enforced, the create a system whereby intellectual infringement of copyrights. PRC’s policies actually encourage the gument relying on TRIPS could proceed on two grounds that will be gument relying on TRIPS could proceed discussed below. PRC government already censors Internet activity, it already possesses the it already possesses Internet activity, already censors PRC government tools. and thorough most efficient 34040-mil_34-4 Sheet No. 111 Side B 10/10/2013 11:12:26 B 10/10/2013 111 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 112 Side A 10/10/2013 11:12:26 R R R R R R R 225 889 note supra , China—Audio- The result in the 228 note 101. see Operation Aurora supra note 30. “[T]he hacker attacks which , supra note 30; supra While Google’s executives have declined While Google’s executives For example, limiting the number of foreign For example, limiting the number of 226 note 12, art. 44. note 177. 227 note 30; Leigh, A Dual Track Approach Track A Dual supra supra supra note 26. Baidu itself allows users to download copyrighted music Baidu itself allows users to download 230 , Darwell, supra In blocking Google, the PRC government has pushed traffic In blocking Google, the PRC government ¶¶ 70, 76. 229 See, e.g. Id. See generally China—Audiovisual Products case was decided largely on the application of GATS, the United case was decided largely on the application Article XLIV of TRIPS requires WTO member countries to establish countries member WTO requires of TRIPS XLIV Article The U.S. government also made a powerful argument in regards to the The U.S. government also made a powerful 230. Jacob, 229. 226. Shane & Lehran, 228. 225. TRIPS Agreement, 227. M K forced Google to quit China in January were orchestrated by a senior member of the forced Google to quit China in January were orchestrated by a senior member of Politburo who typed his own name into the global version of the search engine and found articles criticizing him personally.” Leigh, Summer 2013] infiltrated hackers have of instances where been a variety There have In Op- a new chapter. Aurora marked abroad, but Operation Google from infiltrated program not only government a PRC-funded eration Aurora, of some of in the theft it also resulted user accounts, but Google’s to deny responsi- The PRC government continues Google’s source code. school, and the of the attacks were traced to a military bility, but nearly all of the PRC’s have revealed that a member disclosures by WikiLeaks the attack. Politburo ordered \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 33 10-OCT-13 10:02 224. procedures that enforce the protection of intellectual property rights. property protection of intellectual that enforce the procedures both to Baidu and Youku, both of which are well known for disregarding both to Baidu and Youku, both of copyright laws. without acquiring the necessary the and Youku streams copyrighted videos argument to make, but one that rights. Together, this is a harder TRIPS films that were allowed to be released in the PRC market only led con- films that were allowed to be released of those movies. sumers to purchase pirated versions to comment specifically on which pieces of intellectual property were sto- on which pieces of intellectual to comment specifically a public statement considered serious enough to warrant len, the issue was focus on the Although most of the WTO’s obligations by the company. government must and treatment a member country’s sort of regulations logically relate to commerce, some requirements must provide for private government itself is own behavior. In this instance, if the the government’s ordinarily cannot be of intellectual property rights, it involved in a breach its obligations to protect intel- the case that the government has fulfilled PRC has likely gone beyond what lectual property rights. Instead, the participating in the violation of TRIPS attempted to prescribe by actually intellectual property protections. Although the PRC’s audiovisual importation restrictions. visual on the amount of copyrighted ma- States stated that imposing restrictions serves to create an underground black terial that may enter the PRC only market for those materials. Google/Facebook case has been similar. As Facebook remained blocked in Google/Facebook case has been similar. by copying Facebook’s interface, the PRC, Renren simply took its place though this had been copyrighted by tools, and functionality exactly even Facebook. C Y 34040-mil_34-4 Sheet No. 112 Side A 10/10/2013 11:12:26 A 10/10/2013 112 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 112 Side B 10/10/2013 11:12:26 R M K , C Y Greg 34:857 [Vol. See generally An interesting 234 , http://goasia.about.com/od/Customs-and-Tra- NFORCEMENT BOUT , A V. E This option would benefit both the PRC as its This option would benefit both the 233 231 The Process—Stages in a typical WTO dispute settlement case Michigan Journal of International Law note 16, art. 22, cl. 2. ., http://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6 RG supra O art. 22, cl. 3; Id. RADE The Concept of Saving Face If the PRC does not comply with the ruling, it could choose to pay If the PRC does not comply with the T 232 As any U.S. lawyer might ask, “what good is a right without a rem- might ask, “what good is a right As any U.S. lawyer after entering were to win, the PRC government, If the United States Ultimately, however, the PRC may be unwilling to respond to the Ultimately, however, the PRC may ORLD 233.234. DSU, 231. Google’s competitors actually do a As described above, none of Facebook and 232. The concept of losing face is not unique to China and is a concept recognized in ditions/a/Saving-Face.htm (last visited July 21, 2013). W s10p1_e.htm (“Regarding the type of obligations to be suspended, the DSU imposes certain in requirements. In principle, the sanctions should be imposed in the same sector as that the which the violation or other nullification or impairment was found (Article 22.3(a) of DSU).”). better job at censoring harmful material. most Asian countries. Although there are several facets to the concept, among the most important are avoiding embarrassment and not admitting wrongfulness. Rodgers, 890 PRC be protect- can the all, how After attention. of U.S. be worthy might at a mini- their theft or, when it is causing property rights ing intellectual policies theft? While many in allowing their a complicit role mum, taking and due here are foreseeable the results consequences, lead to unintended policy. to an irrational \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 34 10-OCT-13 10:02 compensation in the amount that Google and Facebook suffer due to the compensation in the amount that Google PRC’s WTO violations. edy?” While the preceding Parts have focused on the legal arguments preceding Parts have focused on edy?” While the quo would come censorship regime, changing the status against the PRC’s politics and WTO Due to a combination of real world with great difficulty. might benefit the the United States would be awarded law, any remedies censorship regime. but not affect the current United States economically mechanism would provides a guide for how the dispute The analysis below issue of remedies. likely deal with the between whether to would have to choose into settlement negotiations, suffer retaliation. As an initial matter, conform, provide compensation, or refrain from censoring Google or it seems unlikely that the PRC would from nearly all of the Western YouTube. Even after immense pressure Indeed, the issue has become of world, it has continued to hold steady. may have become entrenched such prominence that the PRC government culture’s emphasis on not losing in its position, especially given Chinese face. government gets to maintain its regime and helps the United States re- government gets to maintain its regime by Google and Facebook. cover the economic harms suffered put the United States in a difficult United States’ victory at all. This would the forms of retaliation a situation due to the WTO laws surrounding relevant provisions suggest that the member country may utilize. The same category of services and intel- United States take action within the have taken place. lectual property as the violations that 34040-mil_34-4 Sheet No. 112 Side B 10/10/2013 11:12:26 B 10/10/2013 112 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 113 Side A 10/10/2013 11:12:26 891 Additionally, it would have to Additionally, it would 235 ONCLUSION C European Communities—Regime for the Importation, A Dual Track Approach Track A Dual , ¶¶ 69–86, WT/DS27/ARB/ECU (Mar. 24, 2000). While these are major obstacles to overcome, it is While these are major obstacles to 236 Arbitration Decision, See Id. The inability to sanction PRC service providers would lead to a preca- PRC service providers would The inability to sanction In this information age we live in, the U.S. economy will become more In this information age we live in, the 235. 236. M K Sale and Distribution of Bananas—Recourse to Arbitration by the European Communities Under Article 22.6 of the DSU Summer 2013] or their service providers Internet PRC be to block would to this response shown that above has States, but the analysis in the United stock listings rather than Cayman Islands against the actually be a retaliation this would however, it to the WTO, are not parties As the Cayman Islands the PRC. Yet, block- such a route. States to pursue for the United is not impossible of them much use as none is unlikely to serve Internet services ing “PRC” and Facebook revenue in the United States as Google have the stature or PRC absent the censorship regime. would have in the benefit from retali- the United States is most likely to rious situation, as represents a large manufactured in the PRC, which ating against goods decisions as a Utilizing previous WTO arbitration portion of U.S. imports. from the one seek to retaliate in a sector different guide, members who a significant burden. of the dispute must overcome that was the subject the same sector prove that imposing sanctions under Such a country must not total an amount not be practicable or would of trade would either it is entitled to. equal to the damages \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 35 10-OCT-13 10:02 dependent on its Internet pioneers for economic growth. As such, Google dependent on its Internet pioneers for the future of the United and Facebook are important companies task ahead of it in challenging States. The United States faces a difficult have been referred to as a “domestic the PRC for what may traditionally the best venue for such a battle and its policy” of censorship. The WTO is the primary obligations, including the GATS and TRIPS, should enable United States to claim victory against the PRC’s discrimination against Google and Facebook for several reasons. First, the censorship of Google and Facebook appears to contradict the PRC’s own concession schedule, which is made binding through the GATS. Second, blocking Google and likely that the United States would satisfy the requirements. As detailed likely that the United States would here is in the billions of dollars above, the amount of trade being impacted Additionally, the lack of services and, therefore, a serious circumstance. from the PRC into the United States and intellectual property that flow Indeed, the vast majority of likely requires utilizing a separate agreement. come in the form of manufactured PRC exports to the United States have no trouble imposing measures goods and the United States should damages the censorship regime has upon those imports that amount to the between the two countries alone is inflicted as the trade deficit in goods enough. prove that the circumstances are serious enough to seek suspension under prove that the circumstances are serious another agreement. C Y 34040-mil_34-4 Sheet No. 113 Side A 10/10/2013 11:12:26 A 10/10/2013 113 Side Sheet No. 34040-mil_34-4 34040-mil_34-4 Sheet No. 113 Side B 10/10/2013 11:12:26 M K C Y 34:857 [Vol. Michigan Journal of International Law 892 is and Renren Tudou, Baidu, allowing China while in mainland Facebook the allowing or sponsoring principle. Lastly, of the MFN likely a violation TRIPS, titans goes against from U.S. Internet property theft of intellectual property protect intellectual of the WTO to members which requires rights. \\jciprod01\productn\M\MIL\34-4\MIL404.txt unknown Seq: 36 10-OCT-13 10:02 34040-mil_34-4 Sheet No. 113 Side B 10/10/2013 11:12:26 B 10/10/2013 113 Side Sheet No. 34040-mil_34-4