Rationality and Ethical Values in Management

1. Session 12 The Internet and Multi-jurisdictional Compliance: Yahoo! on trial Rationality and Ethical Values in Management

2. The Case (1) • February 2000: An Activist sounds the Alert Mark Knobel discovers a box of Zyklon B auctioned on Yahoo.com • March-April 2000: Early Warnings in the Press Yahoo!: “To censor Nazi goods would create a dangerous precedent. But we respect a certain morality: There are no live animals sold at auction” • April 2000: Yahoo! Stands Accused Licra & UEJF:Yahoo! is asked to suppress Nazi objects on any sites accessible from French Territory

3. Political Fascism Skinhead Fascism White Power White Supremacy Militia Groups Anti-Semitism Race Hate Holocaust Denial World Conspiracy Violent Sects, religious or not Violent Anti-Homosexuality Violent Anti-Abortionism Violent Political Activism Bomb making Information Hatred.com: Extremism on the Net Between 1400 and 2000 “problematic sites”

4. The Case (2) • May 15, 2000: Yahoo! Makes its case “The company deplores having to oppose, for legitimate causes of its own defense, the ideas of the plaintiffs” • May 22, 2000: The Judge and the Ruling Exposing Nazi objects for them to be traded contravenes French Law but, even more, constitutes an offense to the collective memory of the country.” Yahoo! is required to propose solutions. • June 2000. Jerry Yang prepares for its interview

5. You are Jerry Yang • Are you going to follow the decision of the French court? • Are you going to propose technical solutions to filter French access to Yahoo.com? • Do you want to impose American values on the Internet?

6. Unworthy Words • The French Court is very naive… • There is no technical solution that would work… • We respect Censorship in China… • Jerry Yang • Interview in Liberation, June 2000

7. The Case (3) • June 2000: The Chief Yahoo! is interviewed Yahoo! will not propose technical solutions to abide by the court decision • July-November 2000: Inside Internet Technology Expert Committee:There is no perfect solution, but it is possible to block approximately 80% of French users • November 2000: The Judge Last Words Yahoo! summoned to obey: “a moral and ethical exigency that all democratic societies share”. • Yahoo! has already defined its strategy: All nazi objects will be removed in January 2001.

8. The Verdict • Appeal does not suspend decision • Date is fixed • 100 000 FRF per day if absence of compliance • A filtering solution is proposed • Large Media Coverage • Yahoo! appears as the loser

9. Share Price Evolution Ruling Verdict

10. A Word from a Lobbyist Anti-smoking groups could have a go at the tobacco manufacturers’ sites, environmental groups could attack sites over genetically modified food – the list is endless… Mike Pullen - DLA, Brussels office In reaction to the Yahoo! case

11. The Many Questions of the Case • Which law should you respect? • Should expression be free? • Should the Internet be regulated? • Are technical solutions useful? • Is it good business? • How to manage activism? • How to communicate?

12. Multi-jurisdictional conflict A Principled Approach “Content originating in the United States should be regulated by U.S. laws, period – and the same should apply to every country.” A Pragmatic Approach “Does the French court have the power to hamper Yahoo!’s operations?”

13. Freedom of Expression A Principled Approach “Exposing offensive ideas to open public debate is the best way to destroy them – so there should be no limits on free speech.” A Pragmatic Approach “Certain ideas have the potential to disrupt public order – and with it any pretention of open debate.”

14. Internet Regulation A Principled Approach “Internet is freedom without borders; it cannot be regulated, and should not be regulated, for this will limit freedom and harm society.” A Pragmatic Approach “Your freedom ends where mine begins, and this applies equally to the Internet.”

15. Technical Issues A Principled Approach “No technology can absolutelyprevent someone from publishingor acceding to something on the Internet. This is the very nature of the medium. Thus partial measures are pointless. ” A Pragmatic Approach “It is possible to block 80% of French users.”

16. Business Issues A Principled Approach “We do not make money directly off auctions; they are user-generated content. As such they reflect local concerns, and obey local rules.” A Pragmatic Approach “Advertising pays for these services; and, allowing certain kinds of content on our sites can be damaging to our global brand.”

17. Managerial Issues A Principled Approach “Our portals are locally-based, and subsidiaries are autonomous with regards to content… We cannot change policies for every user complaint.” A Pragmatic Approach “If someone had called the activists sooner, none of this would have happened.”

18. Communication Issues A Principled Approach “We do not comment on ongoing litigation. Our co-founder can best explain our principles.” A Pragmatic Approach “Is an American the best choice to carry our message to the French in this context?”

19. Two Visions of the World The Good comes by itself The Evil occupies any vacuum

20. Who will foster Regulation? It is a sad fact of the contemporary world that hatred is being spread through the internet by unscrupulous and misguided people. The internet is one of the most effective medium of communication we have in the contemporary world. If we are seeking to promote the values of human rights, tolerance, and respect, can we turn a blind eye to this phenomenon – even recognizing the legitimate issues of freedom of expression involved? It would be hard to let the spread of hatred continue. The drafting of an international convention would provide a process to distil the issues and to work out the strategies and norms required. Bertrand Ramcharan, Acting High Commissioner to Commission on Human Rights Working Group on Racism, Racial Discrimination, Xenophobia and Related Intolerance (United Nations) - February, 2004.

21. Concluding Messages • Freedom does not guarantee ethics; neither do principles. • The validity of a principle cannot be reduced to its validity in every possible instance. • Without a special attention to Early Warning Signals, we are caught by surprise in ethical dilemmas • Dealing legally and centrally with societal attitudes nurture opponents and aggravate ethical conflicts.

22. Next session: Communication in Ethical Crisis • Question to prepare: When you are publicly accused of unethical behaviour, how would you like to react? • Required Reading Who Won the Danone Boycott (Case A)