Hypocritical tech firms happy to do business in oppressive regimes

Taking a high-profile stance in America is a moral indignation loss leader

PayPal isn’t at all bothered to have Saudi Arabia as one of the countries in which it offers its services.Photograph: Alan Betson

PayPal isn’t at all bothered to have Saudi Arabia as one of the countries in which it offers its services.Photograph: Alan Betson

 

This week’s topic is hypocrisy in the corporate world.

Oh, I know – we could be here forever. That’s why I have narrowed down that vast category to what we might term the hypocrisy of moral indignation, highlighted by events in the past week.

Let’s start with technology companies, and their laudable rejection of repugnant discrimination by some US states against people who are lesbian, gay, bisexual or transgender.

In case you haven’t been following along, there actually are states – such as Mississippi, Indiana and North Carolina – that have passed laws allowing citizens to refuse service to people because they are LGBT. A number of conservative states – mainly, the ones which also had a special affection for the Jim Crow laws that persecuted and marginalised African-Americans – have rushed in such laws ever since the US supreme court legalised same-sex marriage last year.

In Mississippi, to take one example, legalised LGBT discrimination is perfectly fine when carried out by churches, religious charities or even private businesses that have a “religious objection” to being decent. Or charitable. Or human.

Rightly, this has caused outrage. And rightly, some companies have taken a stance against such laws, in some cases refusing to do business in those states or even pulling jobs from the state.

Technology companies have been to the forefront of opposing such legislative idiocy. Salesforce and its chief executive Marc Benioff, for example, said the company wouldn’t do business with Indiana and offered to move employees out of the state.

Such high-profile protests, magnified over social media, are effective. According to the New York Times, an Indiana state visitor’s bureau estimates the ongoing dispute over the resulting law has probably cost the state a dozen conferences and $60 million.

Meanwhile, over in North Carolina – the latest state to join this legislative lunacy club – PayPal said this week that it would immediately pull a project for a global operations centre in Charlotte, worth $3.6 million and 400 jobs. The company said: “Becoming an employer in North Carolina, where members of our teams will not have equal rights under the law, is simply untenable.”

I support such positions 100 per cent. Good on you, tech companies. But, wait. As a longtime, tech industry veteran friend pointed out this week, are these the same technology companies that are happy to do business in and with all sorts of nations that have far more discriminatory laws against LGBT people than, say, refusing to serve people a sandwich in a restaurant?

Execution

Why, yes, they are. PayPal, for example, isn’t at all bothered to have Saudi Arabia as one of the countries in which it offers its services. Salesforce has not taken a public stance against doing business there, either. Yet gay people in the country face imprisonment, chemical castration or even execution. PayPal has operational centres in Singapore, Russia and Malaysia, while Salesforce has a centre in Singapore – all countries that have anti-LGBT laws on the books.

Not to pick on just those companies. A whole roster of technology firms that publicly oppose discrimination on the basis of sexual orientation or gender or race, and which decry oppression and censorship, nonetheless carry on lucrative business with countries that discriminate and oppress, with only a very rare squeak of protest.

Sometimes they carry on, with excuses that appear to be more about hanging on to market share in countries with poor human rights records, than taking a moral stance.

Google was among the first of the new wave of powerful internet-era technology companies to offer such hogwash, after being caught censoring results in China, in compliance with Chinese government demands. Google’s excuse at the time – in 2006 – was that it could do more to advance free speech by complying with Chinese demands (uh, right).

Four years later, Google finally did the right thing and refused to keep censoring results. But only after the Gmail accounts of thousands of Chinese human rights activists were breached, allegedly by Chinese state hackers.

Does such a decision affect business? Well, yes. In Google’s case, in 2009, prior to its decision to stop censoring results, about 30 per cent of searches in China went through Google. By late 2010, that had dropped to 12 per cent. By the end of 2013, Google accounted for just 1.7 per cent of searches.

So, making the right ethical decision has its costs. And we therefore should praise the companies drawing a line on where they will do (some types of) business in US states.

But given all the global locations where technology companies are still willing to carry on doing business, or have an operational base, forgive me for suspecting that taking a high-profile stance in an American state is a moral indignation loss leader. Maybe the publicity makes up for any business losses there.

Maybe the enforced silence of the far more oppressed elsewhere is a moral voice on a frequency the corporate ear chooses not to hear.

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