Yahoo! Inc., the most-visited Web site, had to pass documents to the Chinese government that led to the conviction of a local journalist because the company must follow local laws, co-founder Jerry Yang said…
“The government asked for the documents and backed it up with a court order,” said Yang, who was speaking at an Internet conference in Hangzhou, China today. “We had to hand over the documents. We have to comply with the law.”
UPDATE: Donald Clarke disputes Yahoo’s claims of legal obligations on his Chinese Law Prof blog:
Assuming that Yahoo HK is, as it appears to be, a Hong Kong entity, then it is not generally subject to PRC law… If Yahoo HK were a wholly-owned subsidiary of a PRC-domiciled company (let’s call it “Yahoo China Parent”), then there would be a plausible case for saying that Yahoo China Parent could be required by the Chinese government to cause its wholly-owned HK subsidiary to do certain things. But since Yahoo HK is listed as a subsidiary of Yahoo!, Inc., the US parent, in the latter’s most recent Form 10-K (Annual Report for 2004, dated March 11, 2005), then it seems that no entity in the chain of control is under PRC jurisdiction and required to comply with PRC law. Whether or not to comply with a request or demand for information becomes just a business decision.
