Google is hardly the first American company to stray into the state department’s bailiwick. Since the bad old days of the United Fruit Company in Latin America, powerful multinationals have conducted themselves like quasi-states, influencing the foreign lands in which they operate by deciding whether to accommodate or resist the unsavory practices of authorities there.

For Internet companies, that choice has been sharpened by the fact that the World Wide Web is no longer just a force for freedom and diversity but also a tool for repression. Governments use it to spy on dissidents, human rights activists, and other troublesome elements.

This change happened so fast that it left the foreign policy establishment gasping to catch up. It also exposed Washington’s deep ambivalence about information technology: while it champions the free flow of ideas in closed societies like Iran, it fears being a target for cyber-attacks by hostile governments and doesn’t want to export technology that could be diverted into military uses. Conflicted and confused, Foggy Bottom has little to offer Silicon Valley by way of support or even guidance.

Economic attraction
For Google, the sinister side of China’s cyberpolicy eventually came to outweigh the economic attraction of China’s market and the putative benefit of opening the Internet to a vast audience. The choice was not easy. Since late 2006, when it entered China, Google argued that a censored search service was better than no search service at all. But after it discovered that its network had been hacked from inside China, and that the Gmail accounts of human rights activists had been infiltrated, that tradeoff no longer seemed defensible. This “goes to the heart of a much larger global debate about freedom of speech,” Google’s chief legal officer, David Drummond, said in a post explaining the company’s thinking.

As if on cue, the Obama administration made its first major statement on Internet freedom. Secretary of State Hillary Rodham Clinton said the Internet could be a force for good or ill and encouraged governments to use it for good, while urging American companies not to knuckle under to censorship. But she left the work of navigating restrictions to the companies.

The US treasury department did begin allowing firms to export free online services like, chat and photo sharing to Iran, Sudan, and Cuba. Having watched the impetus that Twitter and Facebook gave to antigovernment protests in Tehran, the administration wanted more of it. But the difficult-to-jam high-speed satellite Internet that Iran’s dissidents crave remains unavailable because of sanctions intended to retard Iran’s nuclear programme.

The state department is encouraging the development of technologies that enable users to circumvent restrictions on the Internet. But advocates for some startups said that the government had not allotted enough money or steered support to the most promising ventures. And the US lacks a uniform policy for dealing with American companies that export software that governments can use to filter the Internet.
Shirky says he sees a generational divide. “It’s no accident,” he said, “that Microsoft was founded during the cold war while Google was founded after the cold war.” While Microsoft has a mentality in which national sovereignty still trumps ethical arguments, he said, Google is trying to balance the rights of sovereignty against its own evolving set of values.