Google Board rejects shareholder challenge to its ethics

Google's board of directors has voted down a shareholder petition put forth by the New York City Comptroller's office, which would have compelled its management not to engage in "pro-active censorship," and not to host users' private data in countries that place restrictions on their citizens' Internet use.

Google did not explain why its board recommends shareholders vote down the anticensorship proposal from the Comptroller's Office, which is a trustee of pension funds with $276.2 million in Google shares on behalf of city employees. A similar shareholder petition was issued at the same time to the board of Yahoo, in which the pension fund holds $110.5 million in shares based on last December's value.

Google did not offer further explanation for the decision.

Google was widely criticized last year after it worked with the Chinese government to ensure its search engine in China, Google.cn, limited results to searches on the Dalai Lama, human rights, and other topics.

Comptroller William Thompson, Jr. proposed that company executives institute the following "minimum standards" to protect freedom of Internet access in such countries as Belarus, Burma, China, Cuba, Egypt, Iran, North Korea, Saudi Arabia, Syria, Tunisia, Turkmenistan, Uzbekistan, and Vietnam:

1. Data that can identify individual users should not be hosted in Internet restricting countries, where political speech can be treated as a crime by the legal system.

2. The company will not engage in pro-active censorship.

3. The company will use all legal means to resist demands for censorship. The company will only comply with such demands if required to do so through legally binding procedures.

4. Users will be clearly informed when the company has acceded to legally binding government requests to filter or otherwise censor content that the user is trying to access.

5. Users should be informed about the company's data retention practices, and the ways in which their data is shared with third parties.

6. The company will document all cases where legally-binding censorship requests have been complied with, and that information will be publicly available.
   

"Political censorship of the Internet degrades the quality of that service and ultimately threatens the integrity and viability of the industry itself, both in the United States and abroad," the petition reads.

"Technology companies in the United States such as Google, that operate in countries controlled by authoritarian governments have an obligation to comply with the principles of the United Nations Declaration of Human Rights...[and] have failed to develop adequate standards by which they can conduct business with authoritarian governments while protecting human rights to freedom of speech and freedom of expression."

Said Reporters Without Borders, "More and more initiatives are being taken by individual shareholders and investment funds to force Internet companies to respect certain ethical principles when operating in repressive countries. The New York City Pension Fund's involvement is excellent news because it is an investor with both financial and symbolic weight."